Haynes and Boone, LLP Partner Micah Skidmore talked to Business Insurance about early COVID-19 court cases and why they are being referred to the state supreme courts.
Below is an excerpt:
While policyholders continue to lose most COVID-19-related business interruption coverage disputes, a clear picture on the issue will likely not emerge before state supreme and federal appellate courts issue more rulings on the issue.
Insurers so far have largely argued successfully that the coronavirus does not result in physical loss or damage to property — the critical issue in many COVID-19 cases — and therefore lost revenue is not covered under all-risks policies. Federal courts in particular have mainly ruled in favor of insurers, but policyholder attorneys say it is too soon to draw any conclusions on the overall eventual outcome. …
…Policyholder attorney Micah E. Skidmore, a partner with Haynes and Boone, LLP in Dallas, said policyholders have asked that several cases filed in federal appeals courts be referred to the relevant state supreme court. He said this “makes a lot of sense” because these cases ultimately involve contractual interpretation issues, which are matters of state law.
No state supreme courts have issued rulings on the issue yet, and only two federal appeals courts, the 8th U.S. Circuit Court of Appeals in St. Louis and the 3rd U.S. Circuit Court of Appeals in Philadelphia, have issued decisions, both of which favored insurers.
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