The novel conronavirus pandemic and the massive number of COVID-19 diagnoses have led to governmental orders closing down most non-essential businesses throughout the country. These closures have also brought about thousands of business interruption claims by these businesses against their commercial property insurance policies. Because most of these policies do not provide coverage for a global pandemic—resulting in coverage denials—a number of states have proposed legislation requiring that insurers provide retroactive business interruption coverage, ignoring clear policy language requiring direct physical loss or or damage to property, virus exclusions, and recognition that no premium was collected to pay for claims arising out of a global pandemic.
Should any of these bills become law, it is clear that the insurance industry will bring actions to enjoin these laws on a wide variety of grounds. In an Expert Analysis for Law360, we discuss some of the issues that may arise should any of these bills pass and challenges are brought. You can also find our analysis on the Squire Patton Boggs website here.