Tag: COVID-19

While the COVID-19 Dismissals Pile Up, the Allegations May Matter

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It’s been since September that I have blogged about business income and extra expense and civil authority order insurance coverage for COVID-19 closures and the multiple court cases addressing motions to dismiss. That’s because the cases have been coming down by the dozen, mostly, but not always, on the side of the insurance carrier.

In one of the recent cases, another motion to dismiss the complaint granted with prejudice in favor of the insurer, the court’s analysis was extremely thorough and persuasive. But what struck me most was the court’s commentary on the differences chosen by policyholder counsel in articulating the allegations in the complaint. Those differences are obvious and, although I have not done a statistical analysis, it appears those differences often account for the reasons why some courts have not dismissed these COVID-19 cases. What do you think?

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When the Court Denies a Motion to Dismiss – COVID-19

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As the COVID-19 business interruption cases are decided, many are keeping score. So far, the tally is in favor of the insurance industry, with a number of cases being dismissed for lack of direct physical loss of or damage to covered property by a covered peril.

Most of the cases filed seeking coverage have been met with motions to dismiss by the insurance company. As many of you know, a motion dismiss seeks to throw the case out of court because, on its face, the complaint does not state a cause or action. Basically, the court is saying that the allegations of the complaint, even if true, cannot as a matter of law, lead to coverage. Some courts allow the policyholder to file an amended complaint and some do not. It depends on the specific facts and allegations.

But not all courts have granted the insurance companies’ motions to dismiss. In a recent case, a Missouri federal court denied the motion. In this blog post I examine why.

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Direct Physical Loss of or Damage to Property Under California Law

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Decisions are starting coming down with some frequency in the myriad COVID-19 business interruption coverage cases. This blog post will highlight some aspects of a very recent decision by a California federal court that dismissed the policyholder’s complaint. The court, under California law, addressed the direct physical damage condition of the property policy.

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Reinsurance Aggregation and COVID-19 Losses

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Insurers are paying COVID-19-related claims on all sorts of insurance policies, including workers’ compensation, directors and officers, general liability, event and travel cancellation, production stop loss, accident and health and many others. While the focus of attention is on business interruption, those are not the losses being paid on a daily basis.

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No Direct Physical Loss, No Coverage

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COVID-19 business interruption claims have caused a groundswell of litigation, but courts continue to address business interruption claims in other contexts. The “direct physical loss” requirement remains at the heart of coverage disputes over whether business property policies are required to respond to claims.

Recently, the Eleventh Circuit addressed a business interruption coverage dispute that involved both an alleged downturn in revenue and expenses for cleaning up construction dust and debris.

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Direct Physical Loss Bars Coverage for COVID-19

In yet another COVID-19 decision finding in favor of the insurance company, a Washington, D.C. Superior Court has denied summary judgment to a policyholder and granted summary judgment to the insurer on the issue of direct physical loss.

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Why Can’t Reading the Policy Be a Thing?

I read an article in the New York State Bar Association’s Commercial and Federal Litigation Section‘s magazine, the NY Litigator, Summer 2020, Vol. 5, No. 2, called “A Guide to Insurance Coverage for Business Losses Arising from the COVID-19 Pandemic,” by Bradley J. Nash. The article discusses how there may be coverage under business interruption insurance provisions.

What the article fails to do, and what many policyholder-side articles fail to do, is focus on the purpose for the insurance policy and the actual language contained in the policy. We have written extensively on this on both my prior firm’s Insurance and Reinsurance Disputes Blog and in other publications.

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