All information in this COVID-19 Response Resource issue is effective as of June 16, 2020.

We noted in Parsons Behle & Latimer’s April COVID-19 Response Resources newsletter that some insureds were receiving curt rebuffs from their insurers when they inquired about their business interruption policies covering the losses they were experiencing due to slowed or stopped business operations. We reported at the time that “…it is not a given that there is simply no coverage for businesses who have suffered losses during these hard times.” Since then, there have been court filings, legislative moves and regulatory pronouncements on the subject of insurance coverage for businesses that have sustained financial losses during COVID-19.


More than 300 lawsuits have been filed nationwide in which businesses are seeking coverage from their insurers under their business interruption coverage. Interestingly, the majority of these lawsuits have been filed by restaurants and dental practices. The common vehicle for the lawsuit is a declaratory judgment action in which the insured asks the court for a declaration that the policy provides coverage for the business losses sustained. While declaratory judgment lawsuits seeking declarations of coverage (or, if the insurer is filing the lawsuit, asking for a declaration that there is no coverage) can be resolved more quickly that many types of civil litigation, as of the date of this article, only one published case has progressed to the stage where a trial court ruled on coverage under a business interruption policy. In Social Life Magazine, Inc. v. Sentinel Insurance Co., Ltd., a New York federal court judge last month denied the policyholder’s motion for declaratory judgment arguing that its Manhattan office had suffered physical damage preventing it from printing its magazine due to COVID-19, but the policyholder is reportedly appealing the decision to the 2d Circuit Court of Appeals. 

The arguments being made in these lawsuits for coverage pattern the ones we outlined in our April article. Insurers are relying heavily upon the virus exclusion, but not every business interruption policy contains a virus exclusion. And, even with a policy that has a virus exclusion, there is still a case to be made for coverage. This virus can stay alive on surfaces for several weeks, potentially creating the type of “tangible property damage” the insurers claim must be present to trigger coverage. 


Efforts made by about one-fifth of state legislatures to require insurers to cover business losses by insureds residing in those states appear to have stalled; none of the proposed bills has made it out of committee as of last week. However, last week, the Illinois Department of Insurance issued Company Bulletin 2020-15, which attempts to aid insureds residing in Illinois, including businesses that have suffered damage due to recent civic protests. The Bulletin urges insurers to “err on the side of the policyholder when paying claims as a result of riots, civil commotion or vandalism who were unable to make full premium payments” in the past couple months. With the virus exclusion ostensibly in mind, the Bulletin also urges insurers to “err on the side of the policyholder when considering the use of exclusions that may or may not be applicable.” This Bulletin may spur other states’ agencies that regulate insurance commerce to issue their own proclamations. 

Finally, business insureds may find their states’ administrative regulations useful when making claims with their insurers for COVID-19-related losses, particularly if their insurer tried to dissuade them from making a claim for business loss under their policy. For instance, Utah has an Unfair Claims Settlement Practices Rule governing property claims. The Rule requires “the insurer and its representatives [to] fully disclose “. . . all pertinent benefits, coverages or other provisions of an insurance policy or insurance contract under which a claim is presented.” R590-190-5. Among the practices deemed to be unfair to the insured are “refusing to pay claims without conducting a reasonable investigation” and “advising a client not to obtain the services of an attorney.” R590-190-9. Violations of such rules can be indicative of the bad faith on the insurer’s part. 

If you wish to obtain the services of an attorney, we are experienced in handling coverage claims for insureds, including writing the claims letters for a fixed fee or filing or defending declaratory judgment actions on an hourly fee basis. Please contact Juli Blanch by calling (801)536-6871 or send an email to or Zachary Shea at (775)789-6556 or by email at for more information.