Business Insurance Policies Do Not Cover COVID Losses
Litigation filed by several businesses seeking insurance benefits for COVID-19 related business interruption losses made its way to the 6th U.S. Circuit Court of Appeals. The appeal consolidated a number of cases which had similar allegations and issues.
The 6th U.S. Circuit Court of Appeals determined that the Plaintiffs were not entitled to coverage for economic losses under their commercial property insurance policies because they could not show a “direct physical loss.” This was the required showing under the commercial general liability policies at issue.
The Appellate Court reasoned that most of the Complaints failed to allege what “physical loss” was caused by Covid-19. The Appellate Court was also persuaded by the lack of any claim that COVID-19 was present; that COVID-19 materially altered the property; or, that the Complaints sought a replacement of property purportedly damaged by COVID-19. The Appellate Court reasoned that the Plaintiffs failed to show destruction or alteration of their property, dispossession from their property, or other facts necessary to recover under their insurance policies. The ruling explained that a loss of use was not the equivalent of physical loss.
There have been a number of similar lawsuits filed in Michigan. So far, businesses have been generally unsuccessful obtaining indemnification under their business policies for economic losses related to the COVID-19 pandemic.
Click on the case name to read the court opinion in Brown Jug, Inc. v Cincinnati Insurance Co.
About Alexander & Angelas, P.C.
Alexander & Angelas, P.C. represents defendants in civil liability litigation across Michigan and Northern Ohio. The firm’s practice areas include insurance defense litigation, premises liability, motor carrier (trucking) defense, corporate and commercial litigation, construction defect litigation, auto negligence, insurance coverage disputes, emergency casualty response services, alternative dispute resolution, subrogation claims, workers’ compensation, employment law, and liquor liability.
Attorneys practice in all state and federal courts in Michigan, including Wayne County (Detroit), Macomb County (Mount Clemens), Oakland County (Pontiac), Washtenaw County (Ann Arbor), and Genesee County (Flint). Legal services are also provided in Northern Ohio. Since its founding in 1992, the firm has litigated over 4,000 civil cases.
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COVID and Business Insurance Policies