The Covid-19 Naughty or Nice Coverage List

The Covid-19 Naughty or Nice Coverage List

It’s December – the time of year when we get to reflect on everything we did throughout the year and all that we learned. In 2023, a plethora of coverage opinions, published and unpublished, were released. COVID-19 coverage remains a hot topic, and an area that continues to evolve. We reviewed the coverage decisions stemming from COVID-19 – the naughty and nice – from across the country, to offer you our top tips for insurers in this area! Read our list (and check it twice) below:

  • When an insured seeks to enforce its business-interruption coverage due to COVID-19, it must at least allege the virus was actually present at the subject property. It is insufficient to allege likely contamination or that an infected person entered the property and contaminated it. Without these requisite allegations, the court will likely not be able to get to the real issue: whether the COVID-19 virus could trigger business-interruption coverage by causing physical damage or loss.[i]
  • Even when an insured alleges that the COVID-19 virus caused physical damage to a covered property or properties, it still must prove the property was altered in a tangible way.
  • Some courts have found that the COVID-19 virus cannot cause physical damage or loss to the subject covered property.
  • Many courts across the nation have also determined that loss of use of property due to COVID-19 is not sufficient to trigger coverage.
  • Covered repairs to property damage do not include such things:
    1. Installing barriers for the prevention of the spread of COVID-19,
    2. Replacing HVAC units to prevent the spread of COVID-19, or
    3. Cleaning a company’s facilities due to the potential or actual presence of COVID-19.
  • If the insured is relying on coverage for a communicable disease, it has been found inapplicable when the insured fails to allege COVID-19 was actually present (instead of potentially or possibly present).
  • Courts have also declined to find coverage for disease contamination when the insured failed to include how a government order (or similar) necessitated a covered property or properties be decontaminated and/or evacuated.



So, what did we learn this year? Words are important. In unforeseen circumstances, any ambiguity in insurance contracts will be hammered out piece by piece through litigation. Even a win at court is still a day in court – finding and resolving any uncertain wording or phrases with multiple possible interpretations can be critical in saving time, effort, and money down the road! Insurers should also keep an eye on the cases filed – we also learned that there are plenty of ways for plaintiffs to assert a COVID-19 business interruption pleading incorrectly and very few, narrow ways for a pleading to be filed that is taken seriously.



Keep Reading

More by this author