Lloyd’s Business Interruption Lawsuit Victory Highlights Insurers’ Strength

A new report looking into the first COVID-19 business interruption lawsuit that went to trial notes how the case underscores insurers’ strengths going into such legal proceedings – but there are some outlier cases that could still put insurers on the hook.

The Bloomberg Intelligence (BI) report, entitled ‘Insurers’ Strong Defenses in COVID-19 Coverage Suits,’ analyzes the February 10, 2021 trial win in favor of Lloyd’s in a business interruption coverage lawsuit by a New Orleans-based restaurant.

The suit was in the minority in alleging that the coronavirus was present on premises, and the policy at issue lacked a virus exclusion.

However, the court ruled for Lloyd’s, denying the restaurant coverage.

While there was no reason given, BI noted that the verdict suggested that the court found that neither the presence of the virus nor the government shutdown orders constituted physical loss for purposes of coverage.