To Cover Or Not To Cover:

How US courts are addressing COVID-19 claims

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Over the past few months, insurance carriers have asserted that the virus exclusion and the definition of “direct physical loss” were the determining factors for throwing out thousands of business interruption cases due to Government sanctioned COVID-19 closures. But as Wakefern Food Corp v. Liberty Mutual Fire Insurance Co. demonstrated, loss of physical functionality and use does constitute a covered loss. So, what does this new precedent mean for the other 1200+ cases making their way through the US court system?

Both the plaintiffs and the defendants in these cases are relying on precedence to sway the court to rule in their favor. But, as insurance contracts are contracts of adhesion, any ambiguity in the language is in favor of the party that did not write the terms, i.e. the business owners. The implication is then, hundreds of thousands of denied claims may be reversed. As this was never the intention of the business interruption endorsement on the policy, what are the consequences for the insurance industry in total?

Click below to look at the article below from PropertyCasualty360 that breaks down the case findings in the context of the policy language. 
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