COVID related closures have wrecked the economy and, in the process, it has opened up insurers to lawsuits which will only continue to grow as the pandemic drags on. At the start of the pandemic, many property and casualty brokers had point blank said they were never going to cover this, and any future policies would have virus exclusions added. Seven months later, things have come to a head as court battles begin with many businesses suing their insurers over a variety of factors. In a running tally compiled by the University of Pennsylvania’s law school as of October 5th 2020.
- Over 3500 suits have been filed in the US, stemming from March all the way through October. Of those, 1200 have been related to business income while just under 1100 have been related to Civil Authority related to the orders themselves.
- 968 of these lawsuits were not related to a class action suit, compared to 78 state class only, 180 federal class and 120 which applied both
- 380 cases had policies that had no specific exclusion related to viruses. 326 cases involved explicit exclusions related to COVID
- Of the cases decided, 62 have been dismissed, with 80 percent dismissed with prejudice or denied. Most of these cases that have been denied involved exclusions in the policy[1]
The numbers show that with the pandemic still ravaging the economy, lawsuits will continue to increase, and insurers will have to decide whether to cover the losses or fight. As it stands, they currently do not want to and its on the judges to make a decision whether or not they will be forced to.
[1] https://cclt.law.upenn.edu/judicial-rulings/
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