A Starbucks store, partially reopenedduring the Coronavirus pandemic, is boarded up to protect againstvandalism during the days of demonstrations protesting the killingof George Floyd and police brutality, Washington, D.C. June 6,2020. (Photo: Diego M. Radzinschi/ALM)
The COVID-19 pandemic has brought a wave of businessinterruption claims and related coverage lawsuits from businessesimpacted by widespread closures.
These businesses already face significant hurdles in obtainingcoverage for pandemic-related losses, as insurers and policyholderslitigate over whether COVID-19 contamination and mandatory closuresto force social distancing measures to constitute "directphysical loss of or damage to property" sufficient to triggercoverage under business interruption policies.In these suits, insurers have argued that these policies provisionswere written to insure against natural disasters that causetangible physical damage to property such as hurricanes andearthquakes, not viral pandemics. At least one court has agreed.
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