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Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of November 1, 2021

Client Alert | 2 min read | 11.02.21

Insurer Wins First COVID-19 Business Interruption Jury Trial

On October 28, 2021, Cincinnati Insurance Company prevailed in the nation’s first jury trial in a COVID-19 business interruption suit. Following a three-day jury trial, the federal jury in the district court for the Western District of Missouri found that Cincinnati did not breach its policy when it denied a Kansas City restaurant and bar operator’s claim for its pandemic-related losses. The verdict sheet did not provide details on the jury’s reasoning. The case is K.C. Hopps, Ltd. v. The Cincinnati Ins. Co.

Courts Dismiss COVID-19 Business Interruption Claims

On October 26, 2021, the district court for the District of New Jersey granted Ohio Security Insurance Company’s motion for judgment on the pleadings and dismissed a wedding venue’s putative COVID-19 business interruption class action. The court found the virus exclusion in the plaintiff’s policy unambiguously barred the plaintiff’s claims. Order at 4. The case is Caterer’s in the Park LLC v. Ohio Sec. Ins. Co.

On October 26, 2021, the district court for the Eastern District of Virginia granted Markel Insurance Company’s motion to dismiss a COVID-19 business interruption claim filed by a group of fitness franchise owners. The court concluded that the plaintiffs did not experience “a ‘direct or physical loss’ that entitles them to recovery because there is no evidence that ‘any insured property was damaged or that Plaintiff was permanently dispossessed of any insured property.’” Order at 14. The court further found that the policy’s virus exclusion precluded recovery, as “the COVID-19 pandemic was the motivation of the government shutdowns at issue.” Id. at 16. The case is Fountain Enterprises, LLC, et al. v. Markel Ins. Co.

New Business Interruption Suits Against Insurers:

On October 22, 2021, several real estate managers sued Affiliated FM Insurance Company in New York state court (New York County) for breach of contract. The plaintiffs allege they have an “all risk” policy with business interruption, civil authority, communicable disease, extended period of liability, and ingress/egress coverage and allegedly contains no virus exclusion. Complaint ¶¶ 3, 81–83. According to the managers, the “inundation” of the coronavirus caused physical loss or damage to their properties. Id. ¶ 5. Along with the presence of the virus, the governmental closure orders purportedly “resulted in Plaintiffs’ tenants stoppage of rental payments due to their inability to utilize the space for which the space was intended,” causing the managers to “suffer[] substantial economic damages.” Id. ¶ 8. The case is Broadwall Mgmt. Corp., et al. v. Affiliated FM Ins. Co.

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Client Alert | 3 min read | 03.28.24

UK Government Seeks to Loosen Third Party Litigation Funding Regulation

On 19 March 2024, the Government followed through on a promise from the Ministry of Justice to introduce draft legislation to reverse the effect of  R (on the application of PACCAR Inc & Ors) v Competition Appeal Tribunal & Ors [2023] UKSC 28.  The effect of this ruling was discussed in our prior alert and follow on commentary discussing its effect on group competition litigation and initial government reform proposals. Should the bill pass, agreements to provide third party funding to litigation or advocacy services in England will no longer be required to comply with the Damages-Based Agreements Regulations 2013 (“DBA Regulations”) to be enforceable....