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The COVID Crisis and the Insurer

September 9, 2020 By

A federal judge in the Western District of Missouri recently ruled in favor of four Missouri companies permitting their lawsuits to proceed. The companies’ lawsuits are seeking damages from their insurer for rejecting claims for COVID-related business losses.

The insurer, who filed a motion to dismiss the companies’ claims, maintained that the policy for each company required direct physical damage or a loss to property in order to receive coverage. The insurer argued that the policy did not provide coverage to the four companies in the scenario presented by COVID. In contrast, the companies argued that their “all risk 1 ” policy with the insurer should allow them to recover revenue lost due to COVID.

The Court ruled that the companies made “plausible” claims for coverage and permitted their case to continue.

This appears to be just the beginning of a wave of similar claims across the Country by businesses against their insurers. A September 1, 2020 article published by The Wall Street Journal noted that more than 1,000 business-interruption coverage dispute cases are currently pending in the court system 2 . According to the University of Pennsylvania Carey Law School, insurers have been successful in defending against similar claims in California, Michigan, and the District of Columbia, as well as in, federal courts in Texas and California 3 .

It appears by all counts, however, that many states have yet to weigh in and the potential for appeal is ripe.

  1. All Risk aka “All Perils” coverage is a type of property coverage for home owners or businesses. There are two common forms of such coverage: 1) “Named Perils” which covers the risks stipulated explicitly in the insurance policy; and 2) “All-risks” insurance will cover the insured for all risks except those which are excluded explicitly in the policy.
  2. Leslie Scism, Insurance Firms Gain Early Lead in Coronavirus Legal Fight Wwith Businesses, WSJ (September 1, 2020),
  3. Covid Coverage Litigation Tracker, University of Pennsylvanie Carey Law School, available at