While businesses nationwide continue to suffer from COVID-19, the insurance industry has been uniform in its message to policyholders: “Don’t turn to us for relief.” Bent on discouraging claims and avoiding lawsuits, insurance companies have outright denied business interruption claims regardless of the circumstances and despite the clear language of their policies providing coverage for such losses. The industry’s effort to construct a case against liability is built around a central pillar—that COVID-19 does not constitute “physical loss or damage” to property necessary to trigger coverage under commercial property policies. In a resounding victory for policyholders a mere five months after the pandemic swept the United States, a federal court in Missouri has issued an opinion signaling that the levee has already broken.

In Studio 417 v. The Cincinnati Insurance Co., the plaintiffs operated hair salons and restaurants in Springfield and Kansas City, Missouri. Each had purchased “all-risk” property insurance policies from The Cincinnati Insurance Co., meaning that they were covered against all risks except for those specifically excluded by the policy. When COVID-19 and various closure orders forced the businesses to suspend or reduce their operations, they submitted insurance claims for their losses. Cincinnati denied the claims and the policyholders filed suit in the Western District of Missouri, asserting a right to payment under the policies’ coverages for business income, extra expense, dependent property, civil authority, extended business income, ingress and egress, and sue and labor.