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In a recent article, Gettry Marcus described the hurdles that the policyholder will most likely face regarding the consideration of a business interruption claim due to COVID-19. Insurance carriers are quick to point out that business losses arising from COVID-19 are not due to a “direct physical loss” or “direct physical damage” to the business property, hence no coverage. 

In an August 12, 2020 ruling, a Federal Judge in the Western District of Missouri is allowing a business interruption lawsuit, involving a group of hair salon and restaurant owners, to proceed. This despite wording in the policy stating that direct physical loss or direct physical damage must be demonstrated. Although in this instance, the policies in question did not contain bacteria and virus exclusion language, this is still potentially a significant victory for policyholders.

The attached article titled “Suit Against Insurers for Coverage of Pandemic Business Losses May Proceed” by Chris Gaetano of the New York State Society of Certified Public Accountants provides a summary of this important ruling.   

Gettry Marcus is actively looking for ways to assist our professional service firm clients during these difficult times. If you would like additional information please contact your Gettry Marcus Advisor or Andrew Ross, the author of this article.