Business Interruption Coverage Federal Court Order due to COVID-19

The US Judicial Panel on Multidistrict Litigation, in a much anticipated Order issued yesterday, rejected attempts by two groups of policyowners, one in Pennsylvania and the other in Illinois, to centralize hundreds of federal cases filed by business owners seeking insurance coverage for business interruption losses related to the COVID-19 pandemic. The Panel sided with insurance companies, and even some policyowners, who objected to consolidating these lawsuits into a single venue. While finding that consolidation may still be appropriate for cases against specific insurers, the Panel found that, generally, nationwide consolidation of cases involving many insurers (more than 100), who may have differing policy provisions, lack common elements that could complicate discovery efforts and slow down proceedings. The Panel, did, however, signal that it would consider “targeted” consolidation involving cases against a single insurer or group of affiliated insurers where common elements among policy provisions might be found. As there can be substantial variation in policy provisions for pandemic related business interruption coverage, it is important if you are a business owner to review your policy. If you have questions about your business insurance coverage, contact one of our experienced attorneys at Stern & Eisenberg, PC, Thomas E. Shea and Zachary Champion.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>