Business interruption insurance coverage is typically provided as part of a company’s commercial property insurance. It is intended to protect businesses against income losses and extra expenses sustained as a result of certain disruptions in their operations arising from a covered cause of loss. As a result of COVID-19 pandemic shutdowns, there has been a flood of litigation brought by policy holders against insurance carriers arising from insureds’ business interruptions. While several state legislators have proposed legislation aimed at addressing business interruption issues, insureds have sought more immediate relief from coverage denials by asserting claims of coverage for COVID-19 related business interruption. 

In the last year and a half there have been more than 1,500 COVID-19 business interruption cases brought in both state and federal courts around the country. Many courts have made it challenging for insureds to recover business interruption expenses, finding that lost business income must be contingent upon some direct physical loss or physical damage to insured property. 

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