In a case that has garnered national attention, a Louisiana appeals court this week ruled that a French Quarter restaurant's insurance policy should cover losses stemming from COVID-19 shutdowns and restrictions that hurt its business.
The case, which was filed initially in March 2020, was the first in the country to seek business interruption insurance payments to cover losses incurred when state and local authorities restricted travel, dining and other in-person gatherings in an effort to control the pandemic.
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New York-based attorney Marshall Gilinsky of Anderson Kill, a specialist in insurance disputes who was not involved in the case, said the Oceana Grill decision is the first to determine that the COVID-19 virus constituted a "physical disruption" to business and was covered by policies that didn't explicitly exclude virus coverage.
Many of the business interruption cases brought so far have resulted in pre-trial rulings, the bulk of which have been in favor of insurers. As Gilinsky notes, most insurance policies — more than 80% — specifically exclude viruses from their coverage. For the policies that do not exclude virus coverage, the key question for state courts has been whether COVID-19 caused "physical damage" that led to disruptions.
"That's the key question and the action in these cases is all in the state high courts," Gilinsky said.
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