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Courts Siding With Insurers Over BI Claims

Courts have decided in favor of insurers in more than a dozen cases since May.
October 14, 2020

An increasing number of U.S. courts are ruling in favor of insurers who deny business income (interruption) claims for losses from government-mandated closures during the pandemic. According to the Insurance Information Institute (Triple-I), courts have decided in favor of insurers in more than a dozen cases since May, with judges finding that coverage is triggered only from physical damage to a property.

“While the insurance industry has been doing its part to step up and support their communities in this time of crisis, pandemics are fundamentally uninsurable events,” said Triple-I CEO Sean Kevelighan, “The federal government remains the only entity with the financial resources to help businesses recover from a systemic event of this magnitude. With the support of the public sector and the innovation of groups like insurers in the private sector, we can come together to work toward recovering from this catastrophe and build a more resilient future.”

READ: Be Wary of Placing Undue Burdens on Insurance Sector During Virus Era

Meanwhile, a panel of judges has preemptively moved to prevent 1,000 COVID-19-related business interruption (BI) insurance lawsuits from consolidating. Bloomberg reported that while the panel shot down any plans to consolidate BI claims, it did find benefit in the merging of 34 cases against insurance carrier Society Insurance.

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