The closely watched battle between insurers and their policyholders over pandemic-linked financial losses has entered its next phase, as federal appeals courts prepare to weigh in on litigation with billions of dollars potentially at stake.
Initial rulings in more than 50 of these lawsuits have made their way to U.S. circuit courts, Bloomberg Law research shows. Nearly all appeals came from small businesses looking for do-overs after being told they can’t tap their policies for financial hits stemming from government-issued shutdown orders and reduced operations.
The first appeals court opinions are likely to set the tone for future and pending challenges, and they also could contribute to an already complex landscape for Covid-19 business interruption claims. Insurers and policyholders are polishing their arguments and strategies, which involve numerous states’ laws and are expected to encompass the impact of non-essential business closures, potential ambiguity in policy exclusions, and which courts should weigh in on this issue.
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