Business interruption has had a huge impact in 2020 and there has been a battle brewing with insurance companies who argue that the policy cannot payout due to the fact that Business Interruption is geared towards physical losses interrupting the business operations (not to mention the exclusions on most policies for pandemic level virus situations).
Truthfully, I don’t think the risk management departments ever considered the possibility of what we have seen in 2020 otherwise there would have been coverage for sale (I can already see that people wouldn’t have bought it either until too late because no one could have predicted this scenario).
A court in North Carolina however, has just ruled:
|NC judge rules COVID shutdown orders caused insured BI loss|
A North Carolina state court judge ruled in favor of 16 restaurants that sued Cincinnati Insurance over COVID-19 business interruption losses, finding that civil shutdown orders created a physical loss under their policies.
This is rather big news as it sets a precedent for other cases and potential claims. Unfortunately, the ruling has to be dissected and appealed before others can use the argument in their favour. It certainly opens the doors for other claims to go through…what will happen? Only time will tell.
Stay healthy and safe.