Judges Break Down Consolidated Business Interruption Claims — Boost For Insurers

A panel of judges has preemptively moved to prevent 1,000 COVID-19-related business interruption (BI) insurance lawsuits from consolidating, which would have swamped the one judge overseeing all the cases.

Last week, a group of judges said that it would be too unwieldly for one judge to administer over 1,000 BI cases from all across the US, ruling that it would be more efficient to have the courts currently hearing the cases decide whether the financial impact of COVID-19 triggered coverage for insurers such as Hartford Financial Services Group, The Travelers Companies, and Lloyd’s.

According to an order written by US District Judge and panel chair Karen Caldwell, letting the judges currently hearing the BI cases decide whether coverage exists “will result in quicker and more efficient resolution of this litigation.”

This would be preferable, Caldwell said, over having one judge attempting to organize and resolve the core policy interpretation issues for all 1,000 cases.

The panel also added that some BI cases have already reached a point wherein the presiding local judge is ready to decide over the coverage issue — consolidating these cases would have ruined any progress made, the panel said, especially with businesses on the line.

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