Business Interruption Loss

A New Jersey trial court recently denied an insurer’s motion to dismiss a COVID-19 business interruption suit brought by a group of optometry practices finding unsettled questions under New Jersey law about whether loss of a property’s functional use can constitute “direct physical loss” under a property policy. Optical Services USA/JC1 v. Franklin Mutual Ins. Co., No. BER-L-3681-20 (N.J. Super. Ct. Bergen Cty. Aug. 13, 2020) (transcript). Based on this finding, the court determined that the optometrists were entitled to issue-oriented discovery and to amend their complaint accordingly.

Continue Reading Policyholders Eye Another Victory in Covid-19 Insurance Litigation

On Tuesday, the English High Court will issue its much-anticipated ruling in “test cases” for coverage of business-interruption losses during the COVID-19 pandemic under sample policy wordings. Irrespective of the outcome, the London court’s ruling promises to be a significant development for the insurance markets in the UK, as billions of pounds in potential insurance claims are at stake and––beyond this––policyholders and/or insurance companies can be expected to argue that one or another of the findings supports their position(s) for interpreting similar policy language in future COVID-19 business-interruption coverage cases.

The FCA Test Case

In the first action of its kind since the agency was established in 2013, the British markets regulator, the Financial Conduct Authority (FCA), engineered the test case process earlier this year to seek legal clarity over insurance companies’ obligations to cover business-interruption claims in the context of the ongoing COVID-19 pandemic. Brought before the English High Court (a trial level court in the UK), the FCA test case involves around 370,000 policyholders and eight insurance companies. The case was heard by Judge Christopher Butcher, who sits in the Commercial Court, and Judge Julian Flaux from the Court of Appeal.  Experienced English counsel prepared and presented arguments to the tribunal for expedited consideration and resolution. The FCA hired a solicitor firm, which instructed well-regarded barristers from Devereux Chambers and Fountain Court Chambers; the insurers engaged their own solicitors and barristers.


Continue Reading Policyholders and Insurers Await Highly Anticipated English High Court Ruling Regarding Coverage for COVID-19 Business-Interruption Losses