Big Businesses Step Into Pandemic Insurance Coverage Fight

In the past year, mom and pop businesses have gone up against their insurers for coverage of losses related to COVID-19 disruptions. However, these businesses have repeatedly lost their cases, as judges have found that government shutdowns and the virus itself don't add up to a "physical loss or damage" to the insured businesses as outlined in their policies.

Now, large businesses such as professional sports teams, casinos and retail giants have stepped into the fray looking to change the outcome, and it could mean a new future for what business interruption allegations look like in court.

Big law firms with a specialized insurance practice will be able to offer a stronger litigation strategy, Law 360 reported. And super large policyholders also have unique insurance policies that insurance recovery attorneys will address more clearly, they said.

Many of the early suits made only "cursory allegations'' of property loss, according to David Klein, a Insurance Recovery & Advisory partner at Pillsbury. But for newer suits, he believes policyholders will "go deeper and spell out" with scientific evidence the kind of damage to insured properties that results from the coronavirus.

"There is a narrative that the insurance industry has cultivated that these cases are losers," Klein told Law360. "If you really parse the decisions, it is a pretty close call in the eyes of the courts."

The past year of COVID-19 litigation saw insurers cherry-pick the policyholder suits that weren't well-pleaded, he added.

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