COVID-19 Business Interruption Lawsuits Update

COVID 19 Business Interruption Lawsuits Update

Many businesses across the country were forced to close due to shelter in place orders put in place by state or local officials. This has led to the loss of millions of dollars in revenue. Most of these businesses had some type of business interruption insurance to help compensate them for their losses. However, insurance companies are denying claims, and many businesses have been forced to file lawsuits to pursue compensation.

Consolidation of Lawsuits

Hundreds of federal lawsuits regarding business interruption insurance have been filed across the country. The lawsuits filed name 36 insurance groups and 115 different insurers. It was proposed that the lawsuits be consolidated into multidistrict litigation. The insurance industry has filed dozens of briefs opposing multidistrict litigation, claiming that it would complicate and prolong the cases. Some plaintiffs also oppose an MDL, arguing that insurance policies should be interpreted under individual state laws. Things could get complicated, given that every policy is different, and the circumstances of an individual business’s losses may not be similar.

The MDL judicial panel will consider two motions to consolidate when it convenes at the end of July. The motions filed by lawyers for some plaintiffs argue that the businesses are entitled to coverage under property damage or civil authority provisions. The motions argue that it would be more efficient for one court to determine the outcomes that will affect thousands of businesses, while various judges across the country could potentially come to contradictory rulings.

Claim Denials

More and more businesses are experiencing losses as a result of COVID-19. Insurance companies continue to claim, for example, that because there was no physical damage to the businesses, then they can’t pay out on a business interruption claim. Insurers have been categorically denying business interruption claims without examining the individual circumstances of a business’s case. Complaints allege that city shutdown orders made businesses uninhabitable, and they should be able to recover for the loss of revenue. It is estimated that hundreds of thousands of business interruption lawsuits will be filed before the summer is over.

Contact an Experienced Attorney

If your business has had a business interruption insurance claim denied, you should consult with an experienced attorney. Gregg Goldfarb has been helping businesses for over 20 years. Contact us online or call us at 305-374-7000 to schedule a free consultation.

 

 

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