The fallout from COVID-19 has led to a significant number of business interruption lawsuits globally, with various key rulings making waves in the legal and business communities. As companies continue to grapple with the economic implications of the pandemic, courts are being asked to interpret policy language in a context that they never have before.
To understand this landscape more comprehensively, we have cataloged some of the most significant cases and trends in COVID-19 business interruption litigation, dating back to the start of the pandemic.
Key Cases
In a significant case, the 9th Circuit cited precedents from more than 800 similar cases across the nation, shooting down a COVID-19 business interruption lawsuit over lack of direct physical loss or damage. This is indicative of the increasing criticism faced by businesses who are failing to establish a clear link between the pandemic and its alleged physical harm to their property (Law.com).
Further highlighting the lack of a consensus on this matter, the Pennsylvania Supreme Court agreed to hear arguments in two diverging COVID-19 business interruption cases wherein the Pennsylvania Superior Court concluded on contrasting coverages. The rulings emerged as a contentious issue due to their potential to sway court decisions nationwide (The Legal Intelligencer).
Trends & Analysis
In several key rulings, courts have indicated that they require plaintiffs to prove that the COVID-19 virus caused ‘direct physical loss or damage.’ This trend was exemplified by a California judge’s dismissal of a business interruption claim, arguing that the only ‘damage’ noted was the presence of viral particles on surfaces, and the only ‘repairs’ noted were cleaning efforts and changes to workspaces (Law.com).
The trajectory of these lawsuits and their overall impact on businesses and the insurance industry will continue to unravel and provide significant subject matter for further legal discussions and policy revisions. This article is up-to-date as of late 2023, and will continue to cover and analyze new developments across the nation (Law.com).