Seventh Circuit Issues Four Coordinated Decisions Finding No Coverage For COVID-19 Losses

On December 9, 2021, the Seventh Circuit Court of Appeals handed insurers an enormous victory when it issued four decisions affirming the dismissal of lawsuits seeking business income coverage for losses sustained from the COVID-19 closure orders. The Seventh Circuit, which sits in Chicago and has appellate jurisdiction over federal courts in Illinois, Indiana and Wisconsin, joined the Sixth, Eighth, Ninth and Eleventh circuits in holding the term "direct physical loss or damage" requires a physical alteration to property for coverage to be triggered under "all-risks" property policies. The Seventh Circuit also found the Microorganism and Ordinance or Law exclusions barred coverage.