Top Developments – December 2020

BUSINESS INTERRUPTION – CORONAVIRUS (COVID-19)

Numerous federal and state courts continue to issue rulings on claims under first-party policies for business interruption coverage related to the COVID-19 pandemic. As our summaries of selected decisions indicate, the results in these cases have heavily favored insurers.

Alabama

Hillcrest Optical, Inc. v. Continental Casualty Company, 2020 U.S. Dist. LEXIS 195273 (S.D. Ala. Oct. 21, 2020)

Insured's temporary inability to use property due to COVID-19 order did not constitute direct physical loss; Court denies insured's request to certify to the Alabama Supreme Court; Finds that a reasonable insured would not understand the policy's "direct physical loss of property" language to cover purely economic losses resulting from the state order.