The Louisiana Fourth Circuit Court of Appeal recently ruled in favor of a New Orleans restaurant’s (Cajun Conti LLC) COVID-19 business interruption suit granting it coverage under an all-risks insurance policy.

Pillsbury Insurance Recovery & Advisory special counsel Scott Greenspan believes the ruling is consistent with over 60 years of case law holding that the presence of a toxic or noxious substance in the indoor air of a business is covered by business interruption insurance because it can cause physical loss or damage to the business’ property.

“This will lead to other similar decisions. Numerous state appellate courts have hesitated in issuing decisions not wanting to be the first to rule for policyholders,” said Greenspan. “That dam has now broken.”

Additionally, he added that the court’s decision confirms if the invasion of a physical substance, such as a virus, causes a slowdown of business operations, the loss is covered by business interruption insurance and the business need not be either totally shuttered or uninhabitable.

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