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John C. Trimble
By John C. Trimble
Property Law
COVID 19 Business Interruption and Extra Expense Litigation May
Be Nearing an End
In March 2020, the world as we knew it changed, and everyone old enough to remember will never forget the stay at home orders that closed businesses and schools and kept us at home for months at a time. Those of us who practice first-party property insurance law will also never forget the immediate onset of business interruption and extra expense claims and the ensuing litigation. Now, after nearly three years of litigation and appeals the majority of claims and suits are nearing an end.
  For those who may be unfamiliar with it, Business Interruption and Extra Expense coverage are coverages that may be purchased with commercial property insurance policies to provide lost profits and extra expenses when a business has been temporarily closed due to a casualty event. In general, they cover lost profits and extra expenses incurred by a business when there has been a “direct physical loss or damage.” Subject to the particular policy’s limits and language, the coverages are available for the period of time needed to get the business rebuilt, repaired, and reopened after a catastrophe such as a fire, flood, tornado, or hurricane.
 When COVID hit businesses of all kinds were immediately shut down, much like they might be after a sudden casualty loss. So, businesses everywhere turned to their insurance for help. Many insurers were caught by surprise, but within a short time most of them were investigating the claims and trying to determine whether their coverages applied. Uniformly, the industry determined that the stay-at-home orders were not “direct physical loss” and that the COVID-19 virus did not cause physical alteration or damage to property. Some policies had virus exclusions. Claims were uniformly denied, and within no time, hundreds of individual and class action lawsuits were filed. New filings occurred in very substantial numbers for the first year and then peaked again at the two-year mark in March of 2022 because most policies had an internal two-year suit limitation.
 As the litigation proceeded the University of Pennsylvania Law School tracked the cases and studied the outcomes. Slowly trial courts made decisions on motions to dismiss and motions for summary judgment and the cases made their way to the appellate courts. Today, nearly three years later, the rulings across the country have been resoundingly in favor of the insurance industry.
 The Law School’s studies have developed some interesting findings. Not surprisingly, the vast majority of litigants were food, restaurant, and retail

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