Ruling On Consolidated Appeals, Third Circuit Affirms Dismissals Of Business Interruption Claims Based On Lack Of Physical Loss Or Damage (Insurance Law Alert)
01.31.23
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(Article from Insurance Law Alert, January 2023)
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The Third Circuit rejected fourteen consolidated appeals of district court dismissals of lawsuits seeking coverage for business interruption losses incurred in the wake of the virus and its related government closure orders. Wilson v. USI Ins. Svs LLC, 2023 WL 116809 (3d Cir. Jan. 6, 2023). Business owners in Pennsylvania, New Jersey, New York, Maryland and Delaware argued that the loss of use of their properties during the pandemic constituted the requisite direct physical loss of or damage to property under their insurance policies. Rejecting these assertions, the court stated: “the businesses lost the ability to use their properties for their intended business purposes because the governors of the states in which they operate issued orders closing or limiting the activities of nonessential businesses, not because there was anything wrong with their properties.” Because the court found no coverage under the operative policy provisions, it did not address whether virus or “ordinance or law” exclusions barred coverage.