Insurance recovery attorney Matthew Goldstein was quoted extensively in an article in Agenda Week on October 12, 2020 focusing on the rise in business interruption insurance claims throughout the US and why businesses are getting denied coverage.
“Insurers are almost unanimously denying every claim … by taking the position that Covid-19 does not constitute a ‘direct physical loss or damage’ to covered property,” says Matthew A. Goldstein, an insurance recovery attorney at law firm Flaster Greenberg. Most property policies contain those precise terms. Therefore, Goldstein explains, in most cases insurance companies have refrained from paying out since they maintain that the virus doesn’t physically alter or destroy property in the way a fire, for instance, would.
When discussing what should trigger coverage, Goldstein points out, in the case Studio 41, Inc. v. Cincinnati Insurance Company (which a federal district court in Kansas City, Mo., refused to dismiss), the judge ruled that since the policies are supposed to be triggered by either physical damage or physical loss, then insurance companies “must give meaning” to each of the terms. To not do so would be to conflate them. But in another case, Social Life Magazine v. Sentinel Ins. Co., Ltd., a Manhattan federal court judge ruled against the plaintiff and used a catchy allusion to emphasize it: “The virus damages lungs. It doesn’t damage printing presses.”
Goldstein advises that plaintiffs allege physical presence of the virus to satisfy the “direct physical loss” mandate of most interruption policies. But he cautions against bringing suits if policies specifically exclude coverage for losses that are caused by or result from any virus.
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