Walter J. Andrews, left, and Casey Coffey, right, with Hunton Andrews Kurth. Courtesy photos
COVID-19 insurance litigation has steadily increased as policyholders seek recovery for their unprecedented losses arising from the pandemic and governmental orders. Across the country, courts continue to come down on opposite sides of the coin on whether COVID-19 constitutes “physical loss or damage” to property. Florida law is clear that ambiguity in the policy’s language should be construed in favor of coverage. Given this clear requirement, courts should broadly construe coverage grants and strictly construe exclusions to resolve the dispute over what constitutes “physical loss or damage” in favor of policyholders. This is particularly true in light of the clearly reasonable alternative findings by multiple courts on this issue.
On one side, insurers have systematically refused to provide coverage for business-interruption claims and losses attributable to COVID-19. They have done so by asserting that COVID-19 does not constitute “physical loss or damage” and that the policies at issue contain so-called “virus” exclusions that preclude coverage for such loss. Policyholders, on the other hand, point to the clear physical nature of the virus and highlight that the “physical loss” threshold has been met: coronavirus particles that cause the highly contagious COVID-19 disease have forced closures by attaching to and damaging their property.
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