COVID-19 Ruling Serves As Cautionary Tale For Policyholders To Satisfy Pleading Requirements

In Short

The Situation: This month, a Michigan state trial court dismissed the COVID-19-related business interruption coverage lawsuit filed by two policyholder restaurants on the pleadings, finding that they had failed to allege any form of physical loss or damage to property (as required by their insurance policy).

The Result: Although the insurance industry has attempted to promote this ruling as a vindication of their COVID-19-related coverage denials, the opinion is actually of little import beyond serving as a reminder to policyholders to exercise care when pleading their COVID-19 claims.

Looking Ahead: Commercial policyholders should be undeterred by the Gavrilides ruling, but make sure to tailor their pleadings to address the particular coverage requirements of their insurance programs when pursuing their COVID-19-related claims.