March 05, 2021 | Legal News

Federal Court Allows COVID-19 Business Interruption Claims to Move Forward

A federal court in Chicago presiding over a consolidated group of sixty-six COVID-19 coverage lawsuits from across the country recently denied an insurer’s motion to dismiss a group of restaurant owners’ COVID-19 “business interruption” claims. The court found that government shutdown orders potentially caused restaurants to suffer “direct physical loss” to their property, even where the restaurants continued to offer takeout or limited dine-in service. The court also ruled that certain plaintiffs could proceed on their statutory “bad faith” claims based on their insurers’ across-the-board denial of their insurance claims. This decision may have an outsized impact given its broad scope and reach across multiple federal jurisdictions.

The case is In re: Society Insurance Co. Covid-19 Business Interruption Protection Insurance Litigation, MDL No. 2964, Master Docket No. 20-CV-5965, 2021 WL 679109 (N.D. Ill. Feb. 22, 2021).

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