On Friday, April 17, 2020, six federal class action complaints were filed against six insurance companies in six different states seeking coverage under Business Income coverage parts of insurance policies to obtain relief for losses occasioned by the COVID-19 pandemic.

We have previously reported on individual suits filed against Certain Underwriters of Lloyd’s of London (Texas and California) and Society Insurance (Illinois) that offered policies that did not include a Virus Exclusion.  Now, class action complaints have been filed against, Lloyd’s (New York), Society (Wisconsin), Aspen American Insurance Company (Texas), Owners Insurance (Ohio), Topa Insurance Company (Wisconsin) and Oregon Mutual Insurance Company (Oregon). Despite the missing exclusion, Lloyds, and the other companies, disclaimed coverage for other reasons including the lack of direct physical loss to insured property by the virus.  The cases all seek to enforce coverage for Business Income, Civil Authority and Extra Expense related losses for policy holders across the country.

Another class action was filed on April 9 by a Florida restaurant against Llyod’s of London for Business Income losses seeking to advance claims for a national class of entities  that entered into standard “all-risk commercial property insurance policies” that failed to exclude pandemic related damages.

It remains to be seen whether a Court will certify the purported classes in any of these actions.  One element that needs to be established to obtain class certification is that all of the claims must involve common questions of law and fact. That could be difficult for a few reasons, including the impact that the virus may have had on a particular business and how it actually resulted in a loss.  For example, a retail establishment that needs its physical property in order to do business versus a service oriented business that may be able to work remotely, but just not as efficiently yet still incurs recoverable loss of income are impacted differently by the virus and its consequences.  There will also be issues regarding the impact of different State laws both with regard to regulating the insurance industry in its State but also with respect to the various, and somewhat dissimilar Executive Orders issued by the Governors shutting down certain “non-essential” businesses.  Some members of the purported class could have been deemed “essential” yet decided to shut down anyway creating further problems in class certification.   Finally, unless all of the policies contain identical language, it is unlikely that a class will be certified.

Although it is apparent that the business and legal community are becoming aggressive in their challenge to the insurance industry’s refusal to cover COVID-19 business losses, you can be certain that insurers will do whatever is necessary to avoid paying claims on those policies.


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.