SDV Insights

On Tuesday, March 24, 2020, the Chickasaw and Choctaw Nations (the "Nations"), located in Oklahoma, filed separate business interruption coverage lawsuits against their collective group of insurers who allegedly issued "all risk" policies to both Nations.

If approved, New York Draft Assembly Bill A10226 (the "Bill") would require property insurers to cover business interruption losses resulting from the COVID-19 pandemic. The Bill would have immediate retroactive effect applying to property policies containing business interruption and loss of use and occupancy coverage, and in force on March 7, 2020, the date Governor Cuomo declared a State of Emergency.

On March 24, 2020, the Massachusetts and Ohio legislatures proposed bills that would provide insurance coverage to small businesses for business interruption losses sustained during the COVID-19 pandemic. These new developments come less than two weeks after New Jersey became the first state in the nation to introduce legislation on this issue.

COVID-19 Business Interruption Challenges

A New York appellate court, in its recent decision in All State Interior Demolition Inc. v. Scottsdale Ins. Co., 92 N.Y.S.3d 256 (N.Y. App. Div. 2019), held that the allegations in a third-party complaint triggered an insurer's duty to defend an additional insured, even when the third-party complaint was filed by the additional insured.

No person or industry in the world will go unaffected by the COVID-19 pandemic. Two related industries that are being hit the hardest are the hospitality and the commercial real estate industries. The hospitality industry is comprised of four segments: food and beverage (F&B), travel and tourism, lodging, and recreation. These four segments often overlap with each other and most segments overlap, to some extent, with the commercial real estate industry.

Every day brings new challenges and concerns as the world grapples with the novel coronavirus. Businesses are already looking to their insurance portfolio as a way to lessen the anticipated impact on their bottom line. Policyholder and insurer side litigators alike seem to agree that we will likely see coronavirus-related coverage issues litigated for years, long after the pandemic has been contained.

Boston's recent decision to temporarily shut down city construction projects has many in the industry asking what impact, if any, a COVID-19 related shutdown would have on project insurance.

On Monday, the iconic New Orleans restaurant, Oceana Grill, filed the first Coronavirus-related business interruption insurance coverage lawsuit in a US jurisdiction. The declaratory judgment action styled Cajun Conti, LLC, et. al. d/b/a Oceana Grill v. Certain Underwriters at Lloyd's, London was filed in Louisiana state court for the Parish of Orleans.

New Jersey is discussing draft legislation that would require certain property insurers to provide coverage for business interruption losses resulting from the Coronavirus pandemic. If approved, N.J. Draft Bill A-3844 (the "Bill") would have immediate effect and apply retroactively to insurance policies in force on March 9, 2020 that insure against loss or damage to property and include loss of use and occupancy and business interruption coverage.