Testing The Waters

The UK High Court of Justice found business-interruption coverage applies to COVID-19-related losses. Will the ripples be felt in the U.S.?

Facing an unprecedented pandemic, states and cities across the U.S. issued emergency lockdown orders starting in March 2020, which shuttered hundreds of thousands of businesses across America, costing those businesses an estimated hundreds of billions of dollars.

Many businesses will never recover. The year 2020 has been unlike any in our lifetime.

Given the massive interruption of businesses in 2020, it is not surprising that policyholders dusted off their business interruption policies to see exactly what it was they were paying for all of those years while never submitting a claim.

As a general matter, business-interruption coverage is not for any business interruption, but rather is a form attached to commercial-property policies, intended to cover business interruption caused by property damage.