Businesses across the country – seeking to recoup losses resulting from COVID-19 and related government closure orders – sought coverage under their insurance policies for business interruption losses.
Depending on the type of loss suffered and the policy at issue, the majority of insurance companies have denied those claims, resulting in an increase of insurance coverage litigation both nationwide and in Pennsylvania.
While many cases remain ongoing, there have been a significant handful of cases that have already been decided with more courts ruling in favor of the insurers than not.
However, two courts recently ruled in favor of businesses and held that the insured can suffer a physical loss without damage to property, thereby allowing recovery for COVID-19 business interruption losses. These cases are significant for businesses which are attempting to find coverage under their existing insurance programs.
Whether coverage exists is dependent on multiple factors, such as the language of the policy, the definition of “physical loss” or “physical damage,” the type of closure order in effect, and whether the interruption was due to a government order or the actual presence of COVID-19 in the workplace.
Businesses should continue to review their property insurance policies to determine if coverage may exist. If you have any questions or would like to discuss what potential options exist for your business, please contact your Metz Lewis relationship attorney, Steve Petrikis (412-918-1191 or firstname.lastname@example.org), or Josh Baker (412-918-1149 or email@example.com).