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Business Interruption Trends and Cases Triggered by COVID-19


The gleaming billboards of Times Square went dark on May 27 for one minute to alert the nation that pandemic-related business interruption insurance claims are being denied by insurers. Lawsuits are proliferating, and, of course, financial experts play a key role in supporting or disputing damages and valuation claims. BVWire reached out to Luke Brown, a retired insurance attorney and frequent writer on insurance matters, to suggest a few resources to help financial experts get up to date on what’s going on in this area.

An article on gives a good overview of evaluating business interruption claims in a post-COVID-19 world, says Brown. It states that whether the interruption losses can be appropriately measured and supported will ultimately depend on the credibility of the submitted documentation. To access the article, click here (free registration required).

Crowell Moring, a large international law firm with a substantial insurance practice (mostly representing insurers), puts out a regular “Client Alert” that includes a section on new business interruption suits against insurers, with a “a lot of case cites—including links to case documents—and good analysis,” says Brown. 

The success or failure of these cases, and the response to them by insurers, remains to be seen. An example of a response can be found in a case in which the Hartford Fire Insurance Co. filed a complaint against one of its insureds (a shoe company) in Connecticut state court. The complaint seeks a declaration that the losses the business suffered are excluded by the policy’s virus exclusion and otherwise not covered by the policy which, Hartford alleges, requires “‘direct physical loss of or direct physical damage to property,’ and the presence or suspected presence of coronavirus does not constitute direct physical loss or damage to property in these circumstances.”

Who will prevail? One case that has global resonance comes from Paris, where a court recently ruled that AXA should pay a restaurant owner two months of revenue losses the virus pandemic caused (AXA plans to appeal). The business owner has received calls from all over the world asking for details of his contract and the court’s ruling, according to a report from Reuters.

Source note: This article originally appeared in Business Valuation Update and is reprinted with permission from Business Valuation Resources. This article is intended for informational purposes only.


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