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The impact of Covid-19 on the global insurance industry – United States

Wednesday 13 July 2022

Qian Shen
Holland & Knight and Locke Lord, United States (California, Florida, Illinois, New York and Texas)
qian.shen@hklaw.com

Ernesto Palomo
Holland & Knight and Locke Lord, United States (California, Florida, Illinois, New York and Texas)
epalomo@lockelord.com

United States

General questions

Yes/ No/

N/A[1]

Additional comments, if any.

1

Does the country that you are reporting on follow common law jurisprudence?

Yes

California (CA) – Yes

Florida (FL) – Yes

Illinois (IL) – Yes

New York (NY) – Yes

Texas (TX) – Yes

2

If the answer to the above question is no, does the country you are reporting on follow a civil code? Please describe the judicial system in short.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

3

Please provide a brief description of the legal framework applicable to insurance coverage disputes in the country you are reporting on. In so doing, please consider the following questions:

4

Does the insured bear the burden of establishing coverage of a claim, or does the insurer bear the burden of establishing no coverage? Please give a short description of the legal basis in your country

N/A

CA

The insured has the burden of proving both the existence of the policy and its material terms. Searle v Allstate Life, 38 Cal 3d 425, 438 (1995). The insured bears the initial burden of presenting a prima facie case of entitlement to coverage by showing that the claims potentially fall within the insuring provisions of the policy. McMillin v American Safety Indem 233 Cal App 4th 518, fn 23 (2015). The burden then shifts to the insurer to show conclusively that the claims are not covered under the policy. Ibid. If the insurer carries its burden by the application of an exclusion in the policy, then the insured has the burden of establishing an exception to the exclusion. Ibid.

FL

‘The insured has the initial burden of proof to establish that the damage at issue occurred during a period in which the damaged property had insurance coverage. If the insured fails to meet this burden, judgment shall be entered in favor of the insurer.’ Jones v Federated Nat'l Ins Co, 235 So. 3d 936, 941 (Fla Dist Ct App 2018). The burden shifts to the insurance carrier to prove that the loss falls ‘within an exclusionary provision.’ E Florida Hauling, Inc v Lexington Ins Co, 913 So 2d 673, 678 (Fla 3d DCA 2005).

IL

The insured bears the burden of proving a claim is covered, and once that burden is met, the insurer must then prove that the loss was limited or excluded by a contract provision. See First Mercury Ins Co v Nationwide Sec Servs, Inc, 54 N E 3d 323, 330 (Ill App Ct 2016).

NY

The insured bears the burden of showing that an insurance policy covers the loss. MBIA Inc v Fed Ins Co, 652 F 3d 152, 158 (2d Cir. 2011). The burden then shifts to the insurer to show that an exclusion or condition applies to exclude coverage of a claim. Ibid.

TX

The insured bears the initial burden of showing that there is coverage under the insurance policy in question. See eg, Gilbert Texas Constr LP v Underwriters of Lloyd’s London, 327 S W 3d 118, 124 (Tex 2010); Royal Indemnity Co v Marshall, 388 S W 2d 176, 181 (Tex 1965) (insured must show the loss falls within scope of coverage). Once the insured satisfies its burden, the insurer must prove that the claims are not covered under the policy or assert an affirmative defence. Tex Ins Code Ann art 554.002 (West 2005). If the insurer carries its burden by the application of an exclusion in the policy, then the insured has the burden of establishing an exception to the exclusion. Guaranty Nat'l Ins Co v Vic Mfg Co, 143 F 3d 192, 193 (5th Cir 1998).

5

Are coverage provisions in policies interpreted broadly or is there a presumption in favour of coverage? Please give a short description of the legal basis in your country.

N/A

CA

Courts seek to ascertain ‘the mutual intention of the parties at the time the contract is formed.’ Tustin Field Gas & Food, Inc v Mid-Century Ins Co, 13 Cal App 5th 220, 226, 219 Cal Rptr. 3d 909, 914 (2017). California courts ‘look first to the Policy’s language and interpret that language in [its] ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage.’ Ibid. Generally, insurance coverage is ‘interpreted broadly so as to afford the greatest possible protection to the insured, [whereas] … exclusionary clauses are interpreted narrowly against the insurer.’ MacKinnon v Truck Ins Exch, 31 Cal 4th 635, 648(2003).

FL

There is a presumption in favour of coverage if the policy language is ambiguous. ’[I]f the language is susceptible to more than one reasonable interpretation and is therefore ambiguous, the policy will be strictly construed against the insurer and in favour of the insured.’ Sebo v Am Home Assurance Co, 208 So 3d 694, 697 (Fla 2016).

IL

When analysing an insurance policy, the court’s main objective is ‘to ascertain and give effect’ to the intent of the contracting parties. Valley Forge Ins Co v Swiderski Elecs, Inc, 860 N E 2d 307, 314 (2006). Policy terms that are clear and unambiguous will be enforced as written unless doing so would violate public policy. The rule that policy provisions limiting an insurer’s liability will be construed liberally in favour of coverage applies only if a provision is ambiguous. Ambiguity exists only where the policy language is susceptible to more than one reasonable interpretation. State Farm Mut Auto Ins Co v Elmore, 2020 IL 125441, para 21 (3 Dec 2020).

NY

Contract rules of construction apply, including the rule that ambiguities are construed against the draftsman. Throgs Neck Bagels, Inc v GA Ins Co of NY, 241 A D 2d 66, 69 (NY App Div 1998). In insurance, of course, most policies are drafted by the insurer. Generally, coverage is broadly construed and exclusions are narrowly construed, taking into account the reasonable expectations of the parties. Malleolo v Malleolo, 287 A D 2d 603, 603 (NY App Div 2001). The test to determine whether an insurance contract is ambiguous focuses on the ‘reasonable expectations’ of the average insured upon reading the policy. Matter of Mostow v State Farm Ins Cos, 88 N Y 2d 321, 326-27 (1998).

TX

Insurance policies are construed under the same rules of construction as applied to contracts. Gemini Ins Co v Drilling Risk Mgt, 513 S W 3d 15, 21-22 (Tex Ct App 2016). Where ambiguity exists, insurance policies are analysed with a presumption in favour of coverage, that is, in favour of the insured. Ibid. The presumption in favour of coverage in construing ambiguous provision applies only if the insured’s interpretation is reasonable. Ibid.

6

Are exclusions interpreted narrowly or is there a presumption against finding that an exclusion to coverage applies? Please give a short description of the legal basis in your country.

N/A

CA

Exclusions are strictly construed against the insurer and it is the insurer’s burden to ‘ “phrase exceptions and exclusions in clear and unmistakable language.’ Universal City Studios Credit Union v CUMIS Ins Soc’y, Inc, 208 Cal App 4th 730, 741, 145 Cal Rptr 3d 650, 659 (2012). The exclusionary clause ‘must be conspicuous, plain and clear.’ Ibid.

FL

There is an even stronger presumption against an insurer with respect to ambiguous exclusionary clauses. ‘[A]mbiguous exclusionary clauses are construed even more strictly against the insurer than coverage clauses.’ Sebo v Am Home Assurance Co, 208 So 3d 694, 697 (Fla 2016).

IL

Provisions that limit or exclude coverage must be construed liberally in favour of the insured and against the insurer. See Pekin Ins Co v Miller, 854 N E 2d 693, 697 (2006). However, where a policy provision is clear and unambiguous, the words ‘must be given their plain, ordinary, and popular meaning.’ Rich v Principal Life Ins Co, 875 N E 2d 1082, 1090 (2007). If a provision has more than one reasonable interpretation, then it will be considered ambiguous and will be construed in favour of the insured. See ibid. Courts, however, will not strain to find an ambiguity where none exists. See ibid.

NY

‘Whenever an insurer wishes to exclude certain coverage from its policy obligations, it must do so “in clear and unmistakable” language.’ Seabord Sur Co v Gillette Co, 64 N Y 2d 304, 311 (1984). The exclusion or exception must be specific and clear to be enforced, and they are not to be extended by interpretation or implication, but instead are construed strictly and narrowly. Ibid.

TX

Exclusions are narrowly construed, and all reasonable inferences are drawn in the insured’s favour. Carolina Ca Ins Co v Sowell, 603 F Supp 2d 914, 923 (N D Tex 2009). If an exclusion is ambiguous, courts adopt the interpretation urged by the insured as long as it is reasonable. Ibid. If an exclusion provision is susceptible to only one interpretation, these presumptions do not apply. Ibid.

7

Are there universally accepted definitions for:

  • event
  • occurrence
  • damage
  • cause
  • originating cause
  • natural peril
  • force majeure
  • loss
  • consequential loss

If the answer is yes, please give a short description of each definition and the legal basis for that definition (ie, a rule of law, case law etc).

N/A

CA – No

FL – No

IL – No

NY

No. Courts look first to policy definitions to the extent these exist. If there is no definition, the courts will use ordinarily understood meanings as guided by the ‘reasonable expectations’ policy interpretation rule. See response to Question 5.

TX – No

Loss causation

Yes/ No/

N/A

Additional comments, if any.

8

Did the country that you are reporting about issue lock-down, stay-at-home or no-travel restrictions in response to Covid-19?

Yes.

CA – Yes

FL – Yes

IL – Yes

NY – Yes

TX – Yes

9

If the answer to the question above is yes, were such orders issued nationally, by state/region or by local city/town. Please give a short description of the issuing authority and the orders issued.

US

In January 2020, the Trump administration imposed travel restrictions on foreign nationals who had travelled through China. In February, the United States imposed additional travel restrictions on travel to most European countries. The US issued stay-at-home and social distancing guidelines beginning 16 March 2020 and expiring on 30 April 2020. The travel restrictions and stay-at-home guidelines are no longer in effect.

CA

Stay at home orders with state-wide effect were issued by the Governor of California. In addition, local public health officers in various localities issued their own shelter-in-place orders.

FL

A stay-at-home order was issued for the entire state of Florida pursuant to Florida Executive Order No 2020-91 (the Order). The Order required all senior citizens and individuals with significant underlying medical conditions to stay at home and take all measures to limit the spread of Covid-19. The Order also instructed all other persons to limit their movements and personal interactions outside of their home to only those necessary to obtain or provide essential services or conduct essential activities. The Order was issued pursuant to the authority vested in the Governor by Article IV, Section (1)(a) of the Florida Constitution Chapter 252.

IL

The orders were issued by the Governor of the State of Illinois pursuant to Sections 7(1), 7(2), 7(8), 7(10), and 7(12) of the Illinois Emergency Management Agency Act, 20 ILCS 3305, and consistent with the powers in public health laws. See https://www2.illinois.gov/Pages/Executive-Orders/ExecutiveOrder2020-10.aspx.

NY

Stay at home orders with state-wide effect were issued by the Governor of New York in March 2020. In addition, local public health officers in various localities issued their own shelter-in-place orders. The State orders have expired.

TX

On 19 March 2020, Texas Governor Greg Abbot issued an executive order closing all schools, bars, gyms and restaurant dining rooms. The order also required citizens to avoid gathering in groups of more than ten people.

10

If the answer to the above question is yes, were the lock-down, stay-at-home or no-travel restrictions mandatory or recommended?

US

The travel restrictions were mandatory. The stay-at-home and social distancing guidelines were recommendations.

CA

The stay-at-home orders were mandatory. All non-restricted travel and activities outside the home was suspended.

FL

Yes for persons at increased risk.

IL

The restrictions were mandatory, except for ‘Essential Businesses and Operations’ and meaning ‘Healthcare and Public Health Operations, Human Services Operations, Essential Governmental Functions, and Essential Infrastructure’ and other exceptions further defined and explained at https://www2.illinois.gov/Pages/Executive-Orders/ExecutiveOrder2020-10.aspx.

NY

The stay-at-home orders were mandatory, subject to certain exceptions for front-line workers and essential needs. Governor Andrew Cuomo implemented a joint travel advisory requiring out-of-state visitors from certain states to self-quarantine for 14 days.

TX

The stay-at-home orders were mandatory. Governor Gregg Abbott implemented an executive order requiring out-of-state visitors from certain states to self-quarantine for 14 days.

11

If the country that you are reporting about did issue lock-down, stay-at-home or no-travel restrictions, were those orders suspended or revoked at any point in time? If the answer is yes, please give a short description of the timeline.

Yes

US

See comments in response to Question 9.

CA

Yes, the stay-at-home or shelter-in-place orders were lifted at various times and none remains in effect as of 20 December 2021.

Brief timeline:

  • 16-18 March 2020 – various local shelter in place orders go into effect;

•   19 March 2020 – Governor Newson issues state-wide stay at home order;

  • April/May 2020 – plans gradually to lift stay at home orders announced, reopening takes place regionally based on various factors.

FL

Executive Order No 2020-91 was effective from 3 April 2020 and expired on 30 April 2020.

IL

Yes, the stay-at-home restriction ended on 29 May 2020.

Brief timeline:

  • Executive Order 2020-10. On 20 March 2020, Governor Pritzker ordered, effective from 21 March 2021, that all individuals currently living within the State of Illinois were to stay at home or at their place of residence (subject to exclusions as set out in the order) and when outdoors, ‘must at all times and as much as reasonably possible maintain social distancing of at least six feet from any other person.’ Non-essential businesses were also required to close, all public and private gatherings were prohibited and travel was banned (subject to exclusions). See https://www2.illinois.gov/Pages/Executive-Orders/ExecutiveOrder2020-10.aspx.
  • Executive Order 2020-18. On 1 April 2020, Governor Pritzker extended Executive Order 2020-10 in its entirety until 30 April 2020. See https://coronavirus.illinois.gov/resources/executive-orders/display.executive-order-number-18.2020.html.
  • Executive Order 2020-32. On 30 April 2020, Governor Pritzker released another executive order, effective from 1 May 2020, allowing residents to leave their home for essential activities, including for health and safety, for necessary supplies and services, for outdoor activity, for certain types of work, to take care of others and to engage in the free exercise of religion, but otherwise requires them to stay at home or their place of residence to prevent spread of Covid-19. It was further ordered that: (1) non-essential businesses remain closed; (2) all public and private gatherings of people occurring outside a single household or living unit were prohibited; and (3) all travel, except for essential travel, was prohibited. See https://coronavirus.illinois.gov/resources/executive-orders/display.executive-order-number-32.2020.html.
  • Executive Order 2020-38. On 29 May 2020, Governor Pritzker ordered, effective immediately, that certain activities that were paused due to Covid-19 could resume. This order outlined public health requirements for individuals, businesses, retail stores, manufacturers, office buildings, restaurants and bars, gyms, personal service facilities, youth sports and places of public amusement. The order did not limit the free exercise of religion, and indoor services were not to exceed more than ten people. Individuals had to continue to practicing social distancing, maintaining at least a six-foot distance, and wearing a face covering in public places or when working. See https://coronavirus.illinois.gov/resources/executive-orders/display.executive-order-number-38.2020.html.

A full list of executive orders through present can be found at: https://coronavirus.illinois.gov/resources/executive-orders.html.

NY

Yes, the stay-at-home or shelter-in-place orders were lifted at various times and none remain in effect as of 16 January 2022.

Brief timeline:

  • 20 March 2020 – Governor Cuomo issues state-wide stay at home order;
  • 27 April 2020 – Plans to gradually lift stay at home orders announced, reopening takes place regionally based on various factors.

TX

Yes, the stay-at-home or shelter-in-place orders were lifted at various times and none remain in effect as of 16 January 2022.

Brief timeline:

  • 19 March 2020 – Governor Abbott issues state-wide stay at home order.
  • 17 April 2020 – Plans to gradually lift stay at home orders announced; reopening takes place regionally based on various factors.

12

If the answer to the above question is yes, were subsequent lock-down, stay-at-home or no-travel restrictions issued at any point in time? Please give a short description of the timeline.

Yes

US

Yes. Starting on 6 December 2021, air travellers aged two and older coming into the US from foreign travel, regardless of nationality or vaccination status, are required to show documentation of a negative viral test result taken within one day of the flight’s departure to the US before boarding. This applies to all travellers – US citizens, lawful permanent residents (LPRs) and foreign nationals.

CA

Yes. California issued regional stay-at-home orders again in December 2020 following a surge in cases.

Brief timeline:

  • 27 November 2020 – Los Angeles County issues new stay at home order, effective from 30 November 2020;
  • 3 December 2020 – Governor Newsom announces new stay at home orders for any regions where the ICU bed availability drops below 15 per cent, the order takes effect in various localities within days (including the Bay Area and LA) ;
  • 25 January 2021 – Governor Newsom lifts regional stay at home order for all of California.

A detailed timeline is available at: https://abc7news.com/timeline-of-coronavirus-us-covid-19-bay-area-sf/6047519/

FL – No

IL – No

NY

Yes. The timeline is available at: https://ballotpedia.org/Documenting_New_York%27s_path_to_recovery_from_the_coronavirus_(COVID-19)_pandemic,_2020-2021

TX – No

13

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss?

N/A

CA – Yes

FL – Yes

IL – Yes

NY – Yes

TX – Yes

14

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

15

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

16

If the answer to the above question is no, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lock-down or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – No

TX – No

17

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

18

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss, have other courts in the country issued such opinions?

N/A

CA – Yes

FL

Yes.

  • ‘Plaintiff alleges that the forced closure resulted in lost Business Income and Extra Expenses, as defined in the Policy, for both Plaintiff and similarly- situated businesses. Plaintiff specifically alleges that the Executive Order was not issued due to Plaintiff’s premises sustaining direct physical loss or damage. Instead, Plaintiff alleges that the Executive Order prohibited access to Plaintiff's premises due to other property sustaining the direct physical loss or damage of COVID-19 being present.’
    DAB Dental PLLC v Main Street America Protection Ins Co, No 20-CA-5504, 2020 WL 7137138, at *1 (Fla Cir Ct 10 Nov 2020). However, the court dismissed the claim. ‘Here, the Policy does not provide for coverage of the alleged economic losses resulting from the COVID-19 pandemic. Taking as true the facts alleged in the Complaint, and considering such facts in conjunction with the plain language of the Policy, the Court must grant the motion to dismiss.’ Ibid. at *3.
  • ‘Insurance companies cannot bear the burden of this crisis where, as here, the Policy does not provide for coverage of purely economic losses resulting from the COVID-19 pandemic.’ Dime Fitness, LLC v Markel Ins Co, No 20-CA- 5467, 2020 WL 6691467, at *2 (Fla Cir Ct 10 Nov 2020).
  • ‘Under both Florida law and the Policy’s plain language, “direct physical loss of or damage to property” requires “actual, concrete damage” to property to trigger coverage. Plaintiffs have not and cannot plead that the COVID-19 virus has caused direct physical loss or damage to its property. A “probability of illness” or general omnipresence of the virus does not demonstrate or allege how COVID-19 caused damage to the Property.’ Rocco’s Taco Naples, Ltd v Certain Interested Underwriters at Lloyd’s London Subscribing Policy, No W26091190201, No 2020-CA-003294, 2021 WL 4132210, at *1 (Fla Cir Ct 16 Aug 2021) (internal citations omitted).

IL – Yes

NY – Yes

TX – Yes

19

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a ‘cause’ of insured loss? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA

No. There have been some 9th Circuit opinions and a recent state appellate decision, all in favour of the insurer in the context of business loss finding that Covid-19 is not a covered business loss. See, eg, The Inns By The Sea v California Mutual Insurance Co, Super Ct No 20CV001274 (Cal App Ct 17 Nov 2021); Mudpie, Inc v Travelers Casualty Insurance Company of America, 15 F 4th 885, 2021 WL 4486509 (9th Cir 1 Oct 2021).

On the other hand, some trial courts have come out in favour of the insured. For example, on 28 January 2021 in Goodwill Industries of Orange County California v Philadelphia Indem Ins Co, No. 30202001169032CUICCX, 2021 WL 476268, at *3 (Cal Super 28 Jan 2021), a California Superior Court judge denied the insurer’s motion to dismiss plaintiff’s coverage claims on the ground that it could not determine as a matter of law whether, based on the record, plaintiff’s allegations failed to show a ‘direct physical loss.’ Despite acknowledging that California federal cases rejected arguments that business interruption losses due to Covid-19 are covered losses, the court rejected those cases as ‘non-binding’ and distinguishable from plaintiff’s factual allegations, which sufficiently pleaded physical alteration and ‘direct physical loss’ as required under MRI Healthcare Center of Glendale v State Farm General Insurance Company, 187 Cal App 4th 766 (2010) .

FL

Yes. Florida courts have uniformly rejected claims alleging Covid-19 is the ‘cause’ of the insured loss. See responses to Question 18 for courts’ reasoning.

IL

No. With just a few exceptions, most Illinois courts have ruled in favour of the insurer. In the most recent decision, the court held that ‘the term “physical injury” unambiguously connotes […] an alteration in appearance, shape, color or in other material dimension.’ The court observed that many courts have relied on such analysis to hold that ‘direct physical loss’ requires a physical alteration to property. Sandy Point Dental, P C v Cincinnati Ins Co, 2021 US App LEXIS 36399 (7th Cir 9 Dec 2021). However, in JDS Construction Group, LLC et al v Continental Casualty Co, Case No 2020 CH 5678 (Ill Cir Ct 25 Oct 2021), an Illinois appellate court refused to dismiss a business interruption case, holding that the plaintiffs adequately alleged that the virus caused the direct physical loss or damage that is required for coverage under the policy.

NY

Yes. The Second Circuit in Rye Ridge Corp v Cincinnati Ins Co, No 21-1323-cv, 2022 WL 120782 (2d Cir 2022) held that deli owners did not successfully allege that their properties were damaged as a result of government shutdown orders for purposes of proving a covered physical loss under their business insurance policies. Similarly, in 10012 Holdings Inc v Sentinel Ins Co, No 21-80-CV, 2021 WL 6109961 (2d Cir 2021) the court held that shuttering a gallery because of possible human infection does not qualify as a ‘risk of direct physical loss’.

There are cases going through the New York courts considering whether the presence of Covid-19 in an establishment caused the business to suffer losses covered by insurance policies. See Kim-Chee LLC v Philadelphia Indemnity Ins Co et al, 535 F Supp 3d 152 (W D N Y 2021).

TX

Yes, although state courts have yet to address this question. Texas federal courts have uniformly rejected claims alleging Covid-19 is the ‘cause’ of the insured loss. For instance, in DZ Jewelry, LLC d/b/a Zadok Jewelers v Certain Underwriters at Lloyd’s London, 525 F Supp 793 (S D Tex), the policyholder did not plead that the virus was found on any surface of its stores, but rather that it was potentially present because there were confirmed cases in the area, customers had been in the stores before they closed and three employees allegedly tested positive for the virus. The court held that these factual allegations did not ‘plausibly’ allege that the virus had contaminated the store much less caused ‘property damage’. The court was equally unpersuaded that loss of use of the premises was ‘direct physical loss’ because the Fifth Circuit had defined that term to require allegations of ‘distinct, demonstrable physical alteration of the property.’ The court then stated that this language ‘strongly implies that there was an initial satisfactory state that was changed by some external event into an unsatisfactory state.’ (citations omitted.) Further, the policyholder continued to use the property albeit at a reduced capacity. The court also stated that even if the insured had pleaded that the virus was actually present, that may still not have been enough to survive a motion to dismiss because the virus can be cleaned from surfaces with disinfectant and would not have caused ‘property damage’. 

20

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA

Yes. Courts in California have found that intrusion of the virus into a business’s space can constitute the cause of direct loss. See, eg, Boardwalk Ventures CA, LLC v Century-National Ins Co, 2021 WL 1215892 (Cal Super 18 Mar 2021) (denying insurer’s motion for judgment on the pleadings and stating plaintiffs pleaded a cause of action based on the theory that Covid-19 caused loss or damage). No binding state court appears to have conclusively answered the question as to causation. Pez Seafood DTLA, LLC v. Travelers Indem Co, 514 F Supp 3d 1197, 1205 (C D Cal 2021) (holding that virus entering or physically attaching to property constitutes direct loss, as opposed to externally enacted preventative measures including stay at home orders).

FL

No. Florida courts have held that losses related to Covid-19 were not ‘caused’ by the virus. See responses to Question 18 for the courts’ reasoning.

IL

Yes. Courts in Illinois have held that the novel coronavirus and the resulting pandemic proximately caused the business interruptions. In re Soc’y Ins Co COVID-19 Bus Interruption Prot Ins Litig, 521 F Supp 3d 729, 740 (N D Ill. 2021), motion to certify appeal denied, No 20 C 02005, 2021 WL 2433666 (N D Ill 15 June 2021).

NY

Generally, no. New York courts are considering whether the presence of Covid-19 in an establishment caused the business to suffer losses covered by property insurance policies, but the trend appears to be that government orders closing businesses does not result in a covered loss because the loss was not caused by physical damage to property. See Kim-Chee LLC v Philadelphia Indemnity Ins Co et al, 535 F Supp 3d 152 (W D N Y 2021); Visconti Bus Serv, LLC v Utica Nat’l Ins Grp, 71 Misc. 3d 516, 532 (N Y Sup Ct 2021) (closure of insured premises in response to government orders was not ‘caused by direct physical loss or damage to property’).

TX

No, although state courts have yet to address this question. Texas federal courts have held that losses related to Covid-19 were not ‘caused’ by the virus. See responses to Question 19 for the courts’ reasoning.

21

If the answer to the above question is no, do courts in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lock-down or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA

No. The 9th Circuit held in October 2021 that the stay at home orders did not cause ‘ “direct physical loss or damage to property.’ Mudpie, Inc v Traveler’s Casualty Insurance Co, 15 F 4th 885, 892 (9th Cir 2021). A recent state court appellate decision similarly held that the stay at home orders did not cause a direct, physical loss. The Inns By The Sea v California Mutual Insurance Co, Super Ct No 20CV001274 (Cal App Ct 17 Nov 2021).

FL

No. ‘The Court concludes that the mere presence of Covid-19 on business premises does not constitute a direct physical loss of or damage to property. As such, it cannot be found that the Executive Order prohibiting access to the premises was due to a direct physical loss of or damage to property other than at Plaintiff's premises.’ DAB Dental PLLC v Main Street America Protection Ins Co, No. 20-CA-5504, 2020 WL 7137138, at *5 (Fla Cir Ct 10 Nov 2020).

‘The Executive Order was issued in an effort to address public health concerns surrounding the Covid-19 pandemic. Therefore, there is no damaged property to which access was denied, nor was the civil authority issued as a result of the alleged damage here.’ Dime Fitness, LLC v Markel Ins Co, No 20-CA-5467, 2020 WL 6691467, at *4 (Fla Cir Ct 10 Nov 2020).

IL

No. Illinois courts have held that stay-at-home orders are not covered losses because ‘a mere loss of use of property, without any physical alteration, is not “direct physical loss or damage” and therefore does not qualify as a covered cause of loss.’ Bradley Hotel Corp v Aspen Specialty Ins Co, 19 F 4th 1002 (7th Cir 2021).

NY

No. The Second Circuit in Rye Ridge Corp v Cincinnati Ins Co, No 21-1323-cv, 2022 WL 120782 (2d Cir 2022) held that deli owners did not successfully allege that their properties were damaged as a result of government shutdown orders for purposes of proving a covered physical loss under their business insurance policies. Similarly, in 10012 Holdings Inc v Sentinel Ins Co, No 21-80-CV, 2021 WL 6109961 (2d Cir 2021) the court held that shuttering a gallery because of possible human infection does not qualify as a ‘risk of direct physical loss’.

TX

No. Federal courts analysing Texas law have uniformly rejected claims alleging that government lockdowns were the ‘cause’ of the insured loss. For instance, the 5th Circuit in Terry Black's Barbecue L L C v State Auto Mutual Ins Co, No 21-50078, 2022 WL 43170 (5th Cir 2022), held that a barbecue restaurant could not recoup its losses cause by government-imposed pandemic restrictions, finding that suspension of dine-in-services is not covered by physical loss. Specifically, the court held that the losses to the business were not a direct physical loss of property which is required by the policy. Ibid. See also Disel Barbershop, LLC, v State Farm Lloyds, 479 F Supp 3d 353 (W D Tex 2020).

22

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss?

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

23

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss, have other courts in the country issued such opinions? If yes, please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

24

Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’?

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

25

Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

26

If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

27

If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’, have other courts in the country issued such opinions?

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

28

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

29

If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 are covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

30

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of loss causation.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

Aggregation of claims

Yes/  No/ N/A[2]

Additional comments, if any.

31

Does the country you are reporting on permit aggregation of claims arising out of a single originating cause? Please give a short description of the legal basis.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

32

Does the country you are reporting on permit aggregation of claims arising out of a single cause? Please give a short description of the legal basis.

N/A

CA

Yes. In California, ‘When there is a single cause of multiple injuries (or a number of causes that result in a greater number of injuries), courts often look to the cause rather than the injuries in determining the amount of insurance coverage. In such a case, the result is a finding of only one claim, ie, the court looks to the single cause rather than to the multiple injuries.’ Safeco Ins Co of Am v Fireman’s Fund Ins Co, 148 Cal App 4th 620, 633, 55 Cal Rptr 3d 844, 853 (2007).

FL

Yes. Florida follows the majority view on number of occurrences. Florida applies the ‘cause theory’ to determine whether more than one occurrence has taken place. Under this approach, the inquiry is whether there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damages. The focus is on the immediate act that causes the damage. Koikos v Travelers Ins Co, 849 So 2d 263 (Fla 2003).

IL

Yes. Illinois uses the ‘cause’ analysis to determine the number of occurrences. Under this analysis, ‘the court looks to the underlying cause or causes of the damage rather than to the number of individual claims or injuries.’ Nicor, Inc v Associated Elec and Gas Ins Servs Ltd, 841 N E 2d 78, 82 (Ill  App Ct 2005). ‘[T]he court’s inquiry is whether there was one proximate, uninterrupted and continuing cause which resulted in all of the injuries and damage.’ Ibid, at 83.

NY

‘In the absence of a specific aggregation-of-claims provision precisely identifying the operative incident or occasion giving rise to liability, the court must apply the “unfortunate events” test.’ ExxonMobil Corp v Certain Underwriters at Lloyd’s, London, 50 A D 3d 434, 435 (N Y App Div 2008). The ‘unfortunate events test’ is laid out in Arthur A Johnson Corp v Indemnity Ins Co of North America, 7 N Y 2d 222 (1959) such that ‘where one negligent act or omission is the sole proximate cause […] there is, as a general rule, but one accident, even though there be several resultant injuries or losses.’ Ibid, at 227-28).

It should be noted, however, that generally speaking, insurance policies in New York have dropped the reference to ‘accident’ and have adopted the word ‘occurrence’, which is then defined within the policy. See, eg, Appalachian Ins Co v Gen Elec Co, 8 N Y 3d 162, 167-68 (2007). Indeed, business interruption insurance policies, which are the types of policies that are being utilised for claims relating to Covid-19, use the word ‘occurrence’. See, eg, Nat’l Union Fire Ins Co of Pittsburgh, Pennsylvania v TransCanada Energy USA, Inc, 52 Misc 3d 455, 458-59 (Sup Ct N Y Cnty 2016) (noting that ‘occurrence’ under the business interruption insurance policy at issue was defined as the ‘sum total of all loss or damage of the type insured, including any insured Time Element loss, arising out of or caused by one discrete event of physical loss or damages’).

TX

Yes. Texas follows the majority view on number of occurrences. Texas applies the ‘cause’ test to determine whether more than one occurrence has taken place. Under this approach, the inquiry is determined by reference to the underlying cause or causes of the injury or damage, rather than the number of resulting injuries or damage claims. Axis Ins Co v Buffalo Marine Servs, Inc, No H-12-0178, 2013 WL 5231619, at *5 (S D Tex 2013).

33

Does the country you are reporting on permit aggregation of claims arising out of a single event? Please give a short description of the legal basis.

N/A.

CA

California courts look to the source of the cause of the injury, not the number of injuries. ‘When all injuries emanate from a common source [...], there is only a single occurrence for purposes of policy coverage. It is irrelevant that there are multiple injuries or injuries of different magnitudes, or that the injuries extend over a period of time. Conversely, when a cause is interrupted, or when there are several autonomous causes, there are multiple “occurrences” for purposes of determining policy limits and assessing deductibles.’ Safeco Ins Co of Am v Fireman’s Fund Ins Co, 148 Cal App 4th 620, 633–34, 55 Cal Rptr 3d 844, 854 (2007). ‘In sum, for purposes of determining the number of policy limits (or deductibles) available, “occurrence” focuses on the event or events causing the injury.’ Ibid.

FL

Yes. Citizens Property Ins Corp v Cook, 93 So 3d 479 (Fla Ct App 2012) (rejecting trial court’s conclusion that each drink provided to each deceased minor constituted a separate occurrence and instead held that there was only one occurrence causing the deaths, ie, the car crash).

IL

Yes. Where multiple injuries are sustained over ‘an open-ended time period’ due to an ongoing negligent omission, rather than an affirmative act or acts of negligence, a court may, on a case-by-case basis, adopt the time and space test as a limiting principle. Addison Ins Co v Fay, 905 N E 2d 747, 756 (Ill 2009). Under this test, ‘if cause and result are simultaneous or so closely linked in time and space as to be considered by the average person as one event, then the injuries will be deemed the result of one occurrence.’ Ibid. (internal quotations omitted).

NY

The court in SR International Business Insurance Company, LTD v World Trade Center Properties LLC, No 01 Civ 9291HB, 2007 WL 519245 (S D N Y 2007) defined ‘occurrence’ as ‘all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes.’

TX

Under Texas law, ‘the proper focus in interpreting “occurrence” is on the events that cause the injuries and give rise to the insured’s liability, rather than on the number of injurious effects.’ The court looks at ‘the total loss by perils insured against arising out of a single event.’ The court does not look to any ‘overarching cause’, but rather the specific event that causes the loss. U E Texas One-Barrington, Ltd V Gen Star Indem Co, 332 F 3d 274, 278 (5th Cir 2003).

34

Does the country you are reporting on use an accepted test for determining whether claims can be aggregated? For example, does the country you are reporting on apply the four unities test to determine whether aggregation is appropriate? Please give a short description of the legal basis.

N/A

CA – Yes. See tests referenced in the comments for questions 32–33.

FL – Yes. See responses to questions 32-33.

IL – Yes. See tests referenced in the comments for questions 32–33.

NY – Yes. See tests referenced in the comments for questions 32–33, as noted in footnote 2 (above).

TX – Yes. See responses to questions 32-33.

35

Have courts in the country you are reporting on issued jurisprudence concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the legal basis.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

36

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

37

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

38

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether insureds may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

39

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

40

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple properties or business locations arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

41

Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple lock-down or stay-at-home orders arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

42

Have courts in the country you are reporting on issued jurisprudence concerning whether cedents can aggregate claims arising out of Covid-19? Please give a short description of the legal basis.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

43

If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether cedents may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

44

If the answer to the above question is yes, do courts in the country you are reporting about permit cedents to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

45

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and aggregating claims.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX – N/A

Property damage

Yes/ No/ N/A

Additional comments, if any.

46

Have courts in the country you are reporting on issued jurisprudence concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the legal basis.

N/A

CA

Yes, but only preliminarily. Several lower courts have allowed cases to continue past a motion to dismiss on insured’s theory that Covid-19 caused direct, physical loss to property. See Boardwalk Ventures CA, LLC v Century-National Ins Co, 2021 WL 1215892 (Cal Super 18 18 2021) (court declined to issue judgment on the pleadings to the insurer finding that insured stated a potential claim for relief when it alleged that the ‘presence of people infected with the Virus particles renders physical property in their vicinity unsafe and unusable, resulting in direct physical loss to that property.’). See also, P F Chang’s China Bistro Inc, v Certain Underwriters at Lloyd’s of London, No 20STCV17169, 2021 WL 818659 (Cal Super 4 Feb 2021) (denying motion for judgment on the pleadings because complainant reasonably interpreted policy for property damage to include loss of use caused by Covid-19); Goodwill Industries of Orange County California v Philadelphia Indemnity Ins Co, Case No 30-2020- 01169032 (Cal Super 28 Jan 2021) (same).

In contrast, the first appellate decision on this issue held that Covid-19 did not constitute direct physical loss to property because Covid-19 did not ‘cause’ the property to be uninhabitable as with related case law about noxious fumes and th e like, it was the stay-at-home orders that affected the business. The Inns By The Sea v. California Mutual Insurance Co, Super Ct No 20CV001274 (Cal App Ct 17 Nov 2021).

FL - Yes. See comments to Question 49.

IL – Yes. See comments to Question 49.

NY

Yes. A federal appeals court has held that a business property insurance policy does not provide coverage losses unless there is direct physical damage to the property. Forcing a business to shutter its brick-and-mortar location, for instance, is not a direct physical damage to property. 10012 Holdings Inc v Sentinel Ins Co, No 21-80-CV, 2021 WL 6109961 (2d Cir 2021).

TX

Yes. The United States District Court for the Eastern District of Texas held that there was no causal link between government stay-at-home orders and tangible damage such as structural changes or property damage, and thus there was no ‘direct physical loss’ covered by the business insurance policy. Aggie Invs, L L C v Continental Casualty Co, No 21-40382, 2022 WL 67333 (5th Cir 2022).

47

Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

48

If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A

IL – N/A

NY – N/A

TX– N/A

49

If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether losses arising from Covid-19 constitute property damage? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA

No. Several lower-court opinions in California have allowed cases brought by insureds to continue based on the theory that Covid-19 causes direct, physical loss to property, although these decisions were all in early case postures. In contrast, the first state court appellate decision on this question held the opposite, finding that Covid-19 did not cause direct physical loss to property. See The Inns By The Sea v California Mutual Insurance Co, Super Ct No 20CV001274 (Cal App Ct 17 Nov 2021).

FL

Yes. ‘Under both Florida law and the Policy’s plain language, “direct physical loss of or damage to property” requires “actual, concrete damage” to property to trigger coverage. Plaintiffs have not and cannot plead that the COVID-19 virus has caused direct physical loss or damage to its property. A “probability of illness” or general omnipresence of the virus does not demonstrate or allege how COVID-19 caused damage to the Property.’ Rocco’s Taco Naples, Ltd v Certain Interested Underwriters at Lloyd’s London Subscribing Policy, No W26091190201, No 2020-CA-003294, 2021 WL 4132210, at *1 (Fla Cir Ct 16 Aug 2021) (internal citations omitted).

IL

No. On 10 May 2021, the Circuit Court of Cook County dismissed a Covid-19 business interruption claim, finding that business interruption coverage was not available to the insured because there was neither direct physical loss of nor damage to the plaintiffs’ property due to the presence of Covid-19 on the surfaces of the premises, as ‘Covid-19 impacts human health and behavior but not physical structures.’ Fran Napleton Lincoln, Inc et al v Motorists Comm Mut Ins Co et al, No 20 L 6767, Order at 7–8, available at: https://www.crowell.com/files/Fran-Napleton-Order.PDF. Several courts have reached the same conclusion.

On 7 May 2021, the district court for the Northern District of Illinois dismissed a complaint alleging coronavirus-related business interruption losses. The court found that the virus exclusion unambiguously bars coverage for loss indirectly caused by Covid-19 and further found meritless the plaintiffs’ argument that the government closure orders, rather than the virus, caused their losses. M&E Bakery Holdings, LLC d/b/a Bittersweet et al v Westfield Nat’l Ins Co, No 20 C 5849, Order at 7–8, available at https://www.crowell.com/files/ME-Bakery-Order.PDF.

However, the court in JDS Construction Group, LLC et al v Continental Casualty Co, Case No 2020 CH 5678 (Ill Cir Ct 25 Oct 2021) refused to dismiss a business interruption case, holding that the plaintiffs adequately alleged that the virus caused the direct physical loss or damage that is required for coverage under the policy.

NY

Yes. As noted by the Southern District of New York in Sharde Harvey, DDS, PLLC v Sentinel Ins Co, Ltd., 20-CV-3350 (PGG)(RWL), 2021 WL 1034259, at *12 (S D N Y 2021): ‘As consistently and repeatedly held by courts applying New York law, “direct physical loss of or physical damage to” requires some direct physical damage and is not satisfied by government shutdown orders, the COVID-19 pandemic generally, or even the presence of COVID-19 at a premises.’

TX

Yes. Texas courts have consistently held that a ‘direct physical loss of property’ requires a tangible alteration or deprivation of property and that a policy holder who fails to allege such loss will not recover under their respective policies. See Aggie Invs, L L C v Continental Casualty Co, No. 21-40382, 2022 WL 67333, at *1 (5th Cir 2022). Therefore, complaining of lost revenue due to the pandemic generally precludes recovery under business insurance policies, and ‘direct physical loss of property’ does not include a ‘loss of use of property.’ Ibid, at *2. See also Terry Black’s Barbecue L L C v State Auto Mutual Ins Co, No 21-50078, 2022 WL 43170 (5th Cir 2022).

50

If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance.

N/A

CA – N/A

FL – N/A. The issue has not been decided.

IL – N/A

NY – N/A

TX – N/A

51

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and property damage.

N/A

CA – N/A

FL – N/A

IL

Yes. The Illinois Department of Insurance has a helpful webpage titled ‘Illinois Insurance Coverage and Coronavirus (COVID-19)’, which contains a list of frequently asked questions relating to interpretation of insurance policies and Covid-19 claims. The quotes below are from the most relevant guidance provided from the website:

‘‘What is business interruption insurance?’

Business interruption insurance is insurance providing lost income and extra expense coverage that businesses incur as a result of an interruption to their business operations. Business interruption insurance coverage found in most policies require that the interruption be a result of direct physical loss to the property and that the loss or damage must be a result of a covered peril. Insureds should review their policies for specific terms and conditions of their coverage.

Does my policy cover COVID-19?

Most business interruption insurance coverage contains a virus and bacteria exclusion that specifically excludes losses that result from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness or diseases. Please refer to your policy for your specific coverage and consult your agent or insurer if you have questions.

I do not have any policy that says it is a business interruption policy – is it possible that I have coverage under another type of policy?

It is possible to have business interruption coverage under another type of insurance policy. For example, there may be available coverage in policies that cover perils arising out of actions by civil authorities or interruption of your supply chain. You should review your policy and see if it is a covered cause of loss or if it is excluded.

What if my business is closed due to a voluntary or mandatory government order?

Some policies may provide coverage for “civil authority”, which addresses the situation when government prohibits access to your business. If your policy requires a “covered cause of loss” to be the reason why the civil authority restricted access to your business, coverage will depend on whether the COVID-19 outbreak is deemed a covered cause of loss. Some business policies do not have this requirement. Please read your policy carefully.’

Source: https://www2.illinois.gov/sites/Insurance/Consumers/Pages/COVID-19.aspx

NY – N/A

TX – N/A

Exclusions

Yes/ No/ N/A

Additional comments, if any.

52

Has Covid-19 been deemed a ‘natural peril’ in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

Yes

US

On 13 March 2020, President Trump declared the Covid-19 pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, tribes, territories and the District of Columbia pursuant to section 501(b) of the Robert T Stafford Disaster Relief and Emergency Assistance Act, 42 USC 5121-5207.

CA – No

FL – No

IL –No

NY – No

TX – No

53

Has Covid-19 been deemed force majeure in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

N/A

CA – No

FL – No

IL

Yes. The United States Bankruptcy Court for the Northern District of Illinois has ruled that a force majeure clause in a commercial lease partially excused a restaurant tenant from paying rent during the period of the Illinois state executive order restricting dine-in restaurant operations. In re Hitz Rest Grp, 616 B R 374, 378–79 (Bankr N D Ill 2020). force majeure clause in policy: ‘Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations are prevented or delayed, retarded or hindered by [...] laws, governmental action or inaction, orders of government. Lack of money shall not be grounds for Force Majeure.’ Ibid, at 376–77.

NY

Yes. New York courts have held that a party may invoke termination provisions under contract as the Covid-19 pandemic falls squarely within the ambit of a force majeure clause as a ‘natural disaster’. JN Contemporary Art LLC v Phillips Auctioneers LLC, 507 F Supp 3d 490, 501 (S D N Y 2020).

TX – No

54

Is Covid-19 acknowledged as a notifiable disease in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence.

Yes

US

Yes. Covid-19 is a nationally notifiable disease and reporting cases to CDC is supported by routine case notification through the National Notifiable Diseases Surveillance System (NNDSS), as well as resources provided through the CDC Covid-19 response. https://www.cdc.gov/coronavirus/2019-ncov/php/reporting-pui.html

CA

Yes. California lists Covid-19 on its table of reportable communicable diseases pursuant to Title 17, California Code of Regulations (CCR) s 2500, s 2593, s 2641.5- 2643.20, and ss 2800-2812. See https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/ReportableDiseases.pdf.

FL

Yes. The Florida Department of Health describes Covid-19 as the ‘Coronavirus Disease 2019 (COVID-19)’. A copy of the pdf is available here: http://www.floridahealth.gov/diseases-and-conditions/disease-reporting-and-management/disease-reporting-and-surveillance/_documents/covid-19-case-definition.pdf.

IL

Yes. On the Illinois Department of Health website, Covid-19 is described as ‘Coronavirus Disease 2019’. https://dph.illinois.gov/covid19.html This is consistent with the categorisation of Covid-19 as a ‘disease’ by the Centers for Disease Control and Prevention. https://www.cdc.gov/coronavirus/2019-ncov/php/reporting-pui.html

NY

Yes. On 6 September 2021, pursuant to Labor Law s 218-b, the New York State Commissioner of Health designated Covid-19 as a ‘highly contagious communicable disease that presents a serious risk of harm to the public health of New York State.’

TX

Yes. Covid-19 is listed on the Texas Notifiable Conditions pursuant to Health and Safety Code, Chapters 81, 84, and 87. A copy of the pdf is available here: https://www.dshs.texas.gov/IDCU/investigation/Reporting-forms/Notifiable-Conditions-2021-BW.pdf

55

Is it common for insurance policies issued in the country you are reporting on to include a pandemic or virus exclusion? Please give a short description of the legal basis and common insurance practice.

N/A

CA

Yes. ‘Most commercial policies have exclusions for loss due to contamination by virus and similar perils. You should check your policy for a specific exclusion for viral/bacterial contamination or an incident triggered by an epidemic/pandemic, which means insurance would not cover losses related to COVID-19. Also, any claim would still need to be related to your property damage for coverage to be triggered. Conversely, check to see if you have a special endorsement for virus and pandemic although very few, if any, policies are known to have these.’ http://www.insurance.ca.gov/01-consumers/140-catastrophes/FAQ-on-Business-Interruption-Insurance.cfm

FL

Yes. ‘Many commercial property policies have adopted the ISO virus exclusion or similar language. Such explicit exclusions may make recovery for business losses as a result of the COVID-19 pandemic unlikely.’ https://www.flabizlaw.org/files/Doc%23_43529887_v_1_Business%20Interruption%20Insurance%20White%20Paper%205.22.2020.pdf

IL

Yes. ‘Most business interruption insurance coverage contains a virus and bacteria exclusion that specifically excludes losses that result from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness or diseases. Please refer to your policy for your specific coverage and consult your agent or insurer if you have questions.’ https://www2.illinois.gov/sites/Insurance/Consumers/Pages/COVID-19.aspx

NY

Although ‘it is unlikely that a current business interruption policy has contemplated the coronavirus specifically,’ New York’s Department of Financial Services states: ‘[y]ou should check to see if your policy has an exclusion that would disable coverage for an incident triggered by an epidemic or pandemic, which might apply as the COVID-19 situation evolves.’ https://www.dfs.ny.gov/consumers/coronavirus/business_interruption_insurance_faqs

TX

Yes. The insured bears the initial burden to establish that the requirements of the insuring agreement are met. See, eg, Gilbert Tex Const, L P v Underwriters at Lloyd’s London, 327 S W 3d 118, 124 (Tex 2010). Insureds have had significant difficulty in meeting this initial burden showing that their agreements have policies that cover Covid-19-related losses. Moreover, ‘[e]ven when successful on this issue, many policies have virus exclusions that broadly apply to these claims.’ http://www.shidlofskylaw.com/PDF/2021-covid-law.pdf

56

Have any courts in the country you are reporting on determined that a pandemic or virus exclusion is void as against public policy in the context of Covid-19? Please give a short description of the legal basis and relevant jurisprudence.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

57

Have any courts in the country you are reporting on otherwise determined that a pandemic or virus exclusion is unenforceable in response to Covid-19? Please give a short description of the legal basis and relevant jurisprudence.

N/A

CA – No

FL – No

IL – No

NY – No

TX – No

58

If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of exclusions.

N/A

CA

Yes. California courts have upheld exclusions and dismissed insureds’ claims for coverage based on the virus exclusion. See Boxed Foods Co, LLC v Cal Capital Ins Co, 2020 WL 6271021 (N D Cal 27 Oct 2020) (granting motion to dismiss based on virus exclusion); Kingray Inc, et al v Farmers Group Inc, et al, Case No EDCV 20-963 (C D Cal, 4 March 2021) (Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss based on virus exclusion).

FL

Yes. The Middle District Court of Florida in Urogynecology Specialist of Florida, LLC, v Sentinel Insurance Company, Ltd, 2020 WL 5939172 (M D Fla 2020) broke from many other cases in Florida and elsewhere in denying an insurer’s motion to dismiss a Covid-19 business loss claim on the grounds of a virus exclusion in the policy. The court held that the virus exclusion included in an all-risk insurance policy was ‘arguably ambiguous’ as applied to the forced shutdown, which made a coverage determination inappropriate on a motion to dismiss. A subsequent decision in the Southern District of Florida (Nahmad v Hartford Casualty Insurance Company, 2020 WL 6392841 (S D Fla 2 Nov 2020)) granted the insurer’s Motion to Dismiss based on the virus exclusion while noting the contrary holding of the Middle District in a footnote.

IL

Yes. ‘It is uncontested by the parties and widely accepted that SARS-Cov-2, a novel coronavirus, is a virus. Firebirds also alleges that SARS-Cov-2, a virus, “caused direct physical loss and damage to Firebirds' insured properties.” Seeking coverage for loss and damage to insured properties caused by a virus is specifically excluded by the “Contamination” exclusion in the policies at issue. The factual scenario in this case is the exact type anticipated by the exclusion. The applicability of the exclusion is free from doubt. This Court determines that Zurich carried its burden in establishing the unambiguous “Contamination” exclusion apples to the facts alleged in the First Amended Complaint and excludes coverage.’ Firebirds Inter, LLC v Zurich Am Ins Co, No. 2020-CH-05360, 2021 WL 2007870 (Cir Ct of Ill, Cook Cnty 19 Apr 2021) (internal citations omitted).

NY

Yes. For instance, the Southern District of New York in 100 Orchard Street v Travelers Indemnity Ins Co of Am, No 20-CV-8452 (JMF), 2021 WL 2333244 (SDNY 8 June 2021) held that a policy’s virus exclusion barred coverage for the plaintiff's business losses and, therefore, that it need not decide whether the physical presence of Covid-19 constitutes loss or damage within the meaning of the policy.

TX – No

Regulatory oversight

Yes/ No/ N/A

Additional comments, if any.

59

Have insurance regulators in the country you are reporting on issued directives concerning coverage for claims arising out of Covid-19? Please describe the regulations that have been implemented.

N/A

CA

Yes. California regulators have issued Directives:

FL

Yes. Florida regulators have issued Directives:

  • 2020-05M – First responders, healthcare workers, and others that contract Covid-19 due to work-related exposure would be eligible for workers’ compensation benefits under Florida law.
  • 2020-04M – Regulated entities are encouraged, when prudently possible, to be flexible with premium payments in order to avoid a lapse in coverage. Regulated entities are encouraged to only consider cancellation of policies if all possible efforts to work with consumers to continue coverage have been exhausted. Regulated entities, agents, consumers and employers are strongly encouraged to explore virtual options for underwriting and adjusting claims in lieu of in-person property inspections and for premium audits of employers’ records.
  • 2020-01M – Directs insurers to:
  1. use every channel available to them to communicate with their policyholders and share official CDC and DOH information;
  2. devote resources to inform consumers of available benefits, quickly respond to inquiries, and avoid and dispel misinformation;
  3. work with public health officials to do everything possible to prepare and respond; and
  4. consider all practicable options to reduce the barriers of cost-sharing for testing and treatment of Covid-19. See https://www.floir.com/resources-and-reports/covid-19-resources.

IL – No

NY

Yes. New York regulators have issued Directives. Of relevance: (1) directives for financial institutions to alleviate hardship caused by Covid-19 by taking reasonable and prudent actions to support consumers; and (2) encouraging small businesses eligible for participation in the Paycheck Protection Loan Program created by the CARES Act to participate and provide help to small businesses. See https://www.dfs.ny.gov/industry/coronavirus.

TX

Yes. Texas regulators have issued Directives. Of relevance:

  • Directing insurance providers to waive costs associated with Covid-19.
  • Extending deadlines for payment of claims and issuing premium payment grace period (see Question 60).
  • Encouraging providers to:
    • conduct midterm premium audits if requested by policyholders;
    •  allow policyholders to self-audit and report changes in the auditable exposure the company used to calculate the premium;
    • consider any reduced risk for businesses that change operations or elect to continue paying employees when they are not working; and
    • make other adjustments to reduce premium as appropriate. See https://www.tdi.texas.gov/general/covid-19-guidance-to-industry.html.

60

Are regulators requiring or encouraging insurers to provide grace periods to insureds to make payments on premiums? If yes, please give a short description of the legal basis and relevant guidance.

N/A

CA

Yes

FL

Yes. The Florida Department of Insurance Regulation issued Informational Memorandum OIR-20-04M, which is aimed at assisting insureds dealing with complications resulting from Covid-19. The memorandum provides, ‘regulated entities are encouraged, when prudently possible, to be flexible with premium payments in order to avoid a lapse in coverage. Such flexibility can include:

  1. Relaxing due dates;
  2. Extending grace or reinstatement periods;
  3. Waiving late fees and penalties; and
  4. Allowing payment plans.’

IL

Yes. The Illinois Department of Insurance, on 20 April 2020, established a 30-60 day extension for premium payment deadlines for health insurance and stop-loss insurance (in certain circumstances). See https://www2.illinois.gov/sites/Insurance/Companies/CompanyBulletins/CB2020-11.pdf#search=bulletin%202020%2D11.

NY

Yes. New York’s Department of Financial Services issued several grace periods, including:

  • The 134 members of the Life Insurance Council of New York (LICONY), which represent over 80 per cent of the life insurance industry in New York, agreed to extend to 90 days the grace period for the payment of premiums and fees, and for the exercise of policyholder or certificate holder rights, under life insurance policies and annuity contracts in cases of financial hardship due to the Covid-19 pandemic. The emergency regulation adopted by DFS ensures a level playing field by directing all regulated issuers of life insurance and annuity contracts in the state to give the same relief.
  • Today’s emergency regulation also directs property and casualty insurers to provide flexibility to consumers experiencing financial hardship caused by the pandemic by extending to 60 days the grace period for the payment of premiums and fees under auto, homeowners and renters insurance policies, among others. The same relief will be available for businesses with 100 employees or less, independently owned and operated and resident in New York, under auto, homeowners, renters, workers’ compensation, medical malpractice, livery and taxi, and certain other lines of commercial insurance.
  • Premium finance agencies must provide a 90-day grace period (for life insurance policies) and a 60-day grace period (for property and casualty policies) for the payment of instalment payments under the premium financing agreement.
  • DFS also announced that uninsured individuals will be able to obtain health insurance coverage through the NY State of Health, New York’s Health Plan Marketplace, under a special enrolment period from 1 to 15 April. To date, 2,244 New Yorkers have applied.
  • New Yorkers who have lost their jobs due to the pandemic may enrol in the marketplace at any time within 60 days from their loss of coverage, or may be eligible to enrol in other NY State of Health programme.

See https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202003301.

TX

Yes. The Texas Department of Insurance (TDI) issued the following extensions:

  • On 20 March 2020, Governor Greg Abbott suspended certain claim-handling deadlines imposed by law. Additionally, the Commissioner of Insurance has determined that the Covid-19 pandemic is a disaster under Texas Insurance Code Section 542.059(b). Taken together, the Governor’s suspension and the Commissioner’s declaration have the effect of extending claim-handling deadlines imposed by the state’s prompt payment laws for an additional 15 days to help carriers respond to the Covid-19 outbreak. This extension will be in effect until the Governor’s suspension and Commissioner’s declaration are lifted.
  • Moreover, TDI encouraged carriers to use grace periods for payments, temporary suspension of premium payments, payment plans, and other actions to allow continuing insurance coverage as appropriate. The term ‘suspension’ is not intended to mean the forgiveness of the premium.

See https://www.tdi.texas.gov/bulletins/2020/B-0007-20.html.

Government action

Yes/ No/ N/A

Additional comments, if any.

61

Has the government in the country you are reporting on implemented relief measures for losses sustained as a result of Covid-19?

Yes

CA – Yes

FL – Yes

IL – Yes

NY – Yes

TX – Yes

62

If the answer to the above question is yes, are the relief measures available to both individuals and businesses?

N/A

CA – Yes

FL – Yes

IL – Yes

NY – Yes

TX – Yes

63

Briefly describe the types of relief measures available to individuals and businesses.

US

The House of Representatives introduced the Business Interruption Insurance Coverage Act of 2020. This bill requires insurers that provide business interruption coverage to insure as part of this coverage losses from a viral pandemic, a government-ordered business closure or evacuation, or a power disruption conducted for public safety purposes. The bill also nullifies provisions in a business interruption insurance contract in force on the date of enactment that exclude such an event from coverage. An insurer may reinstate such an exclusion if: (1) the insured authorises the reinstatement in writing; or (2) the insured fails to pay the corresponding premium increase after adequate notice by the insurer of such an increase. However, the bill has not been passed into law.

The federal government has passed the following measures into law:

  • Economic impact payments – The Treasury Department, the Bureau of the Fiscal Service, and the Internal Revenue Service (IRS) rapidly sent out three rounds of direct relief payments to most citizens during the Covid-19 crisis.
  • Unemployment compensation – extended employment assistance and waived some federal taxes on unemployment benefits to assist those who lost work due to the Covid-19 crisis.
  • Child tax credit – increased the Child Tax Credit and expanded its coverage to better assist families who care for children.
  • Emergency rental assistance – The Emergency Rental Assistance programme makes funding available to government entities to assist households that are unable to pay rent or utilities.
  • Small business tax credit programmes – The American Rescue Plan extends a number of critical tax benefits, particularly the Employee Retention Credit and Paid Leave Credit, to small businesses.
  • Emergency capital investment programme – Supports the efforts of low- and moderate-income community financial institutions.
  • Paycheck Protection Program – The Paycheck Protection Program is providing small businesses with the resources they need to maintain their payroll, hire back employees who may have been laid off, and cover applicable overhead.
  • Airline and national security relief programmes – The CARES Act included provisions for Treasury to provide payments to passenger air carriers, cargo air carriers, and certain contractors that must be exclusively used for the continuation of payment of employee wages, salaries, and benefits (PSP1).
  • CERTS Program – The Coronavirus Economic Relief for Transportation Services (CERTS) Program is providing eligible transport service companies with resources to help to maintain payroll, hire back employees who may have been laid off, and cover applicable overheads and operational expenses.
  • Payroll relief programmes – Employers of all sizes that face closure orders or suffer economic hardship due to Covid-19 are incentivised to keep employees on the payroll through a 50 per cent credit on up to US$10,000 of wages paid or incurred from 13 March to 31 December 2020.
  • Coronavirus state and local fiscal recovery funds – The American Rescue Plan provides US$350bn in emergency funding for eligible state, local, territorial, and Tribal governments to respond to the Covid-19 emergency and bring back jobs.
  • Capital projects fund – The Coronavirus Capital Projects Fund (CCPF) takes critical steps to addressing many challenges laid bare by the pandemic, especially in rural America and low- and moderate-income communities, helping to ensure that all communities have access to the high-quality, modern infrastructure needed to thrive, including internet access.
  • Homeowner assistance fund – The American Rescue Plan provides nearly US$10bn for states, territories, and Tribes to provide relief for our country’s most vulnerable homeowners.
  • Emergency rental assistance fund – The American Rescue Plan provides US$21.6bn for states, territories, and local governments to assist households that are unable to pay rent and utilities due to the Covid-19 crisis.
  • State small business credit initiative – The American Rescue Plan provides US$10bn to state and Tribal governments to fund small business credit expansion initiatives.
  • Coronavirus relief fund – Through the Coronavirus Relief Fund, the CARES Act provides for payments to State, Local, and Tribal governments navigating the impact of the Covid-19 outbreak.

CA

California has implemented the following state relief measures for individuals and businesses (the list below does not include federal relief programme which are also available in California):

  • Workers’ Compensation – Governor Newsom signed an executive order extending workers’ compensation to Covid-19 claims for workers who were infected with the virus at work between 19 March and 5 July 2020.
  • Unemployment insurance – partial wage replacement benefit payments to workers who lose their job or have their hours reduced, through no fault of their own due to Covid-19.
  • Rent relief – provides financial assistance for unpaid rent for eligible California tenants.
  • Expired benefits (California offered for a period of time following March 2020, but have since expired) – Pandemic Unemployment Assistance; Supplemental paid sick leave; local government supplemental paid sick leave; small business relief grants.

FL

The state of Florida has established the follow relief programmes for individuals and businesses:

  • Utilities – OUR Florida provides eligible applicants assistance with past due utilities. Utility assistance may be provided for households receiving rental assistance under tenant-based or project-based Section 8, other HUD rental assistance or a USDA Rural Development rental assistance programme, living in a public housing unit, or already receiving emergency rental assistance from another source. Utility and/or home energy arrearages may cover a period equal to or less than 15 months and must only be paid in arrears.
  • Housing assistance – Eligible Florida renters can qualify for up to 15 months of rent and utility payments. This includes 12 months of past due rent and utilities and three months of forward-looking rent payments. Furthermore, on 2 April 2020, Governor DeSantis executed Executive Order No 20-94, which placed a 45-day moratorium on mortgage foreclosures. The moratorium was extended until 2 June 2020 pursuant to Executive Order No 20-121.
  • Small business assistance – Florida Small Business Emergency Bridge Loan Covid-19 – Loans of up to US$50,000 available to small businesses in Florida experiencing economic damage due to Covid-19.

IL

The State of Illinois has implemented the following relief measures for individuals and businesses:

  • Loans for small businesses – The US Small Business Administration approved the state’s eligibility for disaster assistance loans for small businesses facing financial hardship in all 102 counties due to Covid-19. Eligible businesses can apply for up to US$2m in low-interest loans at: https://disasterloan.sba.gov.
  • Unemployment insurance – Individuals without access to paid sick leave or unable to work due to Covid-19 can apply for unemployment insurance under the administration's expansion. There is more information at the Illinois Department of Employment Security’s webpage at https://www2.illinois.gov/ides/Pages/COVID-19-and-Unemployment-Benefits.aspx.
  • Utility relief – Governor Pritzker and Attorney General Raoul urged the Illinois Commerce Commission to institute a moratorium on shutoffs for all utility companies across Illinois immediately – including energy, telecoms and water – until the state disaster proclamation has been lifted. Several have announced plans to maintain services and waive late payment fees.
  • Food access – The Pritzker administration worked directly with the eight major food banks across Illinois to expand services. The administration reached out to food manufacturers to ensure food banks are prioritised and can provide vulnerable residents the food they need.
  • Taxpayers – The Illinois Department of Revenue has created a specific webpage to provide information and resources to help Illinois taxpayers, businesses, and others affected by Covid-19. For up-to-date information on available resources, visit the webpage at https://www2.illinois.gov/rev/Pages/Taxpayer-Resources-during-COVID-19-(Coronavirus)-Outbreak.aspx.
  • Taxpayers (extended deadline) – Governor Pritzker extended the income tax filing and payment deadline from 15 April to 15 July. Taxpayers can check the status of their return by using the Where’s My Refund? Link located at www.mytax.illinois.gov.
  • Free/low cost internet – Various broadband providers and mobile carriers offered free or low-cost access in response to the Covid-19 pandemic. The National Digital Inclusion Alliance has information on providers and programs offering free or low-cost broadband at https://www.digitalinclusion.org/free-low-cost-internet-plans.
  • Sales tax assistance for restaurants and bars – Restaurants and bars across the state that incurred less than US$75,000 in sales tax liabilities in 2019 were able to defer sales tax payments. The Illinois Department of Revenue did not charge these businesses penalties or late fees on sales tax payments due in March, April and May 2020.

Source: https://www2.illinois.gov/sites/coronavirus/Resources/Pages/EconomicAssistance.aspx

Additional programmes specifically for businesses:

  • Illinois Small Business Emergency Loan Fund – The Illinois Department of Commerce and Economic Opportunity (DCEO) and Illinois Department of Financial and Professional Regulation (IDFPR) created a fund that offers small businesses low interest loans of up to US$50,000. Businesses located outside of the City of Chicago with fewer than 50 workers and less than US$3m in revenue in 2019 are eligible to apply. Successful applicants will owe nothing for six months and will then begin making fixed payments at a below market interest rate for the remainder of a five-year loan term. There is information about this program at https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/IllinoisSmallBusinessEmergencyLoanFund.aspx.
  • Downstate Small Business Stabilization Program – DCEO repurposed US$20m in Community Development Block Grant funds to offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to US$25,000 in working capital. These grants are offered on a rolling basis. There is information about this programme at https://www2.illinois.gov/dceo/CommunityDevelopment/Pages/DownstateSmBizStabilizaition.aspx.
  • Hospitality Emergency Grant Program – Aimed at helping small hospitality businesses make ends meet, providing up to US$25,000 to eligible bars and restaurants and up to US$50,000 for eligible hotels. There is information about this programme at https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/HospitalityGrantAwards.aspx.

NY

New York has implemented the following state relief measures for individuals and businesses (the list below does not include federal relief programme which are also available in New York):

  • Pandemic Small Business Recovery Grant Program – US$800m in funding for small businesses, including for-profit arts and cultural institutions that were affected by the Covid-19 pandemic.
  • Tourism Return-to-Work Grant Program – US$100m in grant funding to support the rehiring of workers by Covid- affected tourism businesses.
  • Meet in New York Grant Program – US$25m in grant funding to help support the return of conferences, meetings and trade shows that generate significant tourism economic activity through overnight stays, dining and other tourism-related activities.
  • Restaurant Resiliency Program – US$25m in grant funding to support restaurants that provide meals to distressed and under-represented communities.
  • Restaurant Return-To-Work Tax Credit – For small, independently owned restaurants within New York City or any area in New York State designated by the NYS Department of Health as either an Orange or a Red zone for at least 30 consecutive days.
  • New York City Musical and Theatrical Production Tax Credit – For for-profit productions that will take place on a qualified stage with seating of at least 500 seats. US$100m in tax credits to jump start the entertainment industry and support tourism activity in New York City.
  • NYSCA Arts Funding – The New York State Council on the Arts (NYSCA) will administer US$100m+ in funding to assist New York State artists and non-profit arts organisations.
  • New York State Biodefense Commercialization Fund – A US$40m grant fund to encourage and accelerate the development and commercialisation of solutions for serious infectious disease threats.
  • New York Forward Loan Fund (NYFLF) – NYFLF is an economic recovery loan programme aimed at supporting New York State small businesses, non-profits and small residential landlords. First-round funds are successfully deployed; please check back for updates.
  • Emergency Rental Assistance Program – Find out how you can get help with past due rent through the Emergency Rental Assistance Program.

See https://esd.ny.gov/business-pandemic-recovery-initiative.

TX

The state of Texas has established various relief programmes through its state agencies, as described below:

See https://gov.texas.gov/business/page/coronavirus.

 

[1] The answers supplied in this column are the responses applicable to the United States as a whole. Most of the answers relating to the federal US government will be N/A. In the US, insurance is generally regulated at the state level and each state has its own rules and case law governing insurance coverage issues. The McCarran– Ferguson Act, 15 U S C s/ss 1011-1015, is a US federal law that delegates the regulation of insurance to the states and exempts the business of insurance from most federal regulation. State-specific responses for five key states (California, Florida, Illinois, New York, and Texas) are provided in the ‘Additional comments’ column.

[2] Please note that, in the US, the answers to the questions in this ‘Aggregation of claims’ section depend on the language of the individual policies. With this in mind, the questions are answered with respect to direct policies.