The coronavirus pandemic that continues to surge across America has devastating businesses big and small. As companies have been ordered to close to the public or greatly limit the services that they offer, a significant uptick in business interruption claims have been filed. Business interruption insurance is meant to provide a business with finances to keep them afloat while they are unable to conduct regular business operations due to a disaster or government-mandated closure.
The true extent of COVID-19’s impact on the average American business is difficult to comprehend, though. To lend some clarity to the issue, the University of Pennsylvania has developed a helpful “COVID Coverage Litigation Tracker” that outlines how many lawsuits have been filed for business interruption coverage since the start of the pandemic. You can view the entire tracker by clicking here*, but we would like to examine a few key data points here in our blog.
Weekly COVID Interruption Filings
On the week starting Monday, March 16th, 2020, right at the beginning of when lockdowns started to go into effect across the country, the Penn U tracker shows only one relevant lawsuit was filed. Within a month, the number of weekly cases had steadily climbed to 30. In about two months, in early March, the tracker hits its current high point, with 80 cases filed in one week. The total has been averaging at above 50 ever since.
What Do Claimants Want to Be Covered?
The greatest number of COVID business interruption claimants and plaintiffs want business income coverage provided at the end of their claim or lawsuit. Business income coverage can provide a business owner the usual amount of income their company earns each week or month, effectively substituting lost income. The second-leading type of coverage sought is extra expense, which can vary in scope and purpose on a case-by-case basis.
Cases Dismissed So Far
The Penn U COVID coverage litigation tracker currently, at the time of this writing, lists 241 cases that have been interrupted with a motion to dismiss. 183 of those motions cited “no physical loss/damage” as the reason to validate the motion. Business owners and business litigation attorneys had immediate concerns about “no physical loss/damage” being used as a counterargument by insurance companies because business interruption policies have typically been used following natural disasters that damage a commercial property to the point that it is unsafe to be open to the public. In some cases, the argument has been made that the coronavirus has technically caused damage to physical property since its presence on a surface is dangerous and requires that item or surface to be deeply disinfected or entirely replaced.
Another leading cause for a motion to dismiss is virus exclusions. Some policies will not provide coverage if a business interruption occurs due to the presence of a virus, bacteria, or microorganism.
Unsure of Your Policy Coverage? Call a Lawyer
Golomb Legalin Philadelphia is currently hearing from local businesses who have been interrupted and jeopardized due to coronavirus lockdowns. If you are unsure if your policy can provide damages due to fine-print specifics, or if you already filed a business interruption claim that was denied, then you can turn to our attorneys for guidance. We have significant experience dealing with major insurance companies, and we know what to do to make the most of your business interruption insurance coverage. Call (215) 278-4449 to get more information.
(* The Penn U COVID business interruption lawsuit tracker is not fully comprehensive and may have gaps in the data. It also does not account for business interruption claims that did not escalate to a lawsuit due to insurance company resistance. For a further explanation of the tracker’s purpose and information, be sure to visit the FAQ and About sections on the tracker website.)