Business Owners Win Right to Sue Insurers Over COVID-19… Should They?

Insurance companies learned during SARS and other virus outbreaks that such things could be overwhelming, so they did what insurance companies always do, they excluded virus outbreaks from business interruption policies. While some did so explicitly, other insurance companies only offered coverage against “physical damage” that rendered a business inoperable.

With hundreds of thousands of businesses shut down because of the virus, insurance companies are fielding calls left and right where they have to tell the business owners that they’re not covered. The pandemic didn’t cause physical damage, the businesses can still function, they just aren’t allowed to.

When sued over not paying claims, insurance companies have won in Michigan and the District of Columbia. But now a judge has sided with the business owners in Missouri. 

The decision against Cincinnati Insurance Co by U.S. District Judge Stephen Bough in Kansas City appears to be the first victory for policyholders under such claims, but it’s a narrow victory.

The judged didn’t rule that the insurance companies must pay, he only ruled that the policyholders, the businesses, have enough of a case that it shouldn’t be dismissed out of hand.

The judge found the plaintiffs’ argument, that the virus exists as particles on surfaces in their businesses, and therefore represents physical damage, compelling enough to let the case go forward.

The insurance companies say that if such claims are allowed they will be bankrupt, but that doesn’t seem like the right metric. If they offered insurance against something, they should pay if that something happens. But claiming that the virus is “physical” and represents property damage, that seems to stretch the common understanding of the terms.

Besides, can they prove that the virus is on their restaurant property? Or is the state shutting them down as a precaution? And the virus can’t live for more than three days on a surface, so even if it was present at some point, after a few days of the location being closed, it was gone.

It’s easy to see why the business owners want to sue for payment, but it doesn’t look like they have much of a case.

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Comments (3)


  1. Travis Sundance
    Reply

    23 other countries have postponed national elections due to covid & not wanting to risk fraudulent voting—
    but democrats not only WANT our election to take place on schedule but also to incorporate a PROVEN disasterous system for taking / counting votes! Hmmmmmmm, with the recent history of crooked Hillary & Obama / Comey / democratic corruption in the DOJ, FBI, the list goes on & on… I wonder why democrats are so animate about mail in voting? Doesn’t take a rocket scientist to figure out they WANT as many crooked votes to count (in Their favor, of course) as possible— It’s a sad day when ANY political party reaches the level of corruption the democrats have. I used to BE a democrat, but with Obama, Hillary, etc. I had to change to Republican. How many ballots were mailed to DEAD people in California? How many of those votes were COUNTED?? That question, of course, is one that NO democrat would be willing to dig into.

  2. Margaret J. Bowman
    Reply

    This is another Trump lie! He is not going to win in November ! All Americans are watching! He will try to cheat his way in and that will not happen this time. He is a pathological liar and we all know it . I feel confident adding republicans know it as well
    and some of them will not drink the poison again.

    • JIM
      Reply

      Who is drinking the koolaid?
      Margret please wake up they have proof that Barry and Sleepy Joe were involved in spying on the Trump Campaign. It is proven that mail in voting is disastrous. They already have mail in votes sent o dead people and some guys cat. I know you despise Fox News and I agree they tend to stretch their news. But watch them for a couple of days and listen to what they say.
      Harris gave her first speech with Joe yesterday and all she did was LIE. Do some research and not listen to CNN. You will see what I am saying to you. They want to get rid of the police, is that what you want? Who you gonna call, Ghost Busters? Watch the riots, burning, and looting going on that they call calmly protesting. If that is the case WHO shot the little boy over the weekend. You and all the other people of this United States Of America need to wake up.

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