Courts are awash in coverage litigation concerning whether first-party property policies afford coverage for business interruption claims arising out of the pandemic.
Positive diagnoses for COVID-19 in the U.S. now regularly exceed 200,000 per day, and daily fatalities attributed to the virus have at times exceeded 3,000. It seems only a matter of time before plaintiffs’ attorneys start pursuing claims seeking damages on behalf of those who have experienced severe illness or alleged wrongful death because of the virus, in particular from business and premises owners.
The liability theories could be wide-ranging. For example, it might be alleged a business or premises owner failed to enforce a mask-wearing policy, failed to limit the number of customers or visitors, failed to clean the premises after learning someone at the premises tested positive and/or failed to adequately ventilate.
Once such claims are asserted and lawsuits filed, parties and their liability insurers could be faced with determining whether there is a duty to defend.
Such claims and lawsuits will undoubtedly generate disputes over the nature and extent of a party’s obligation to protect workers and invitees and whether there is sufficient evidence of causation to warrant a verdict.
Nevertheless, even putting wrongful death actions aside, expensive hospital stays and symptoms lasting weeks or months, resulting in lost wages and other expenses, might be claimed. The damages sought could be significant, and the parties might eventually determine that it is necessary to consider settlement. At that point, the obligation of the insurer to indemnify will be placed under the microscope.
Potential COVID-19 coverage issues in CGL policies
A typical Commercial General Liability (CGL) policy provides coverage (indemnity and, frequently, defense) with respect to claims seeking sums the insured is legally obligated to pay as damages because of bodily injury (among others), caused by an occurrence, provided coverage is not otherwise excluded.
In cases involving serious illness or death, there might be little dispute that...