Business Insurance Battle For COVID Losses Shifts To State High Courts

Every federal appellate court to consider the question so far has ruled that commercial all-risk property insurance policies do not cover income lost due to the Covid-19 pandemic, but policyholders’ lawyers say the fight is just getting started on the battlegrounds that matter the most: the state supreme courts.

‘It’s definitely not over. That’s the takeaway for 2023,’ said Michael Levine of Hunton Andrews Kurth, who is representing policyholders in multiple Covid-19 business interruption disputes nationwide.

‘Most state high courts still have not spoken on the issue, but the number will increase in 2023,’ Levine said, with new cases pending in the top courts of New York, Louisiana, Nevada, and Alaska -- and, as of Wednesday, California.

Specifically, the 9th U.S. Circuit Court of Appeals asked the California Supreme Court to resolve a split among California appellate courts as to whether the presence of the Covid-19 virus ‘can constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.’