Hunton Insurance Recovery Blog

On September 29, 2020, The National Law Review published an article by Scott DeVries, Lorie Masters, and Michael Huggins concerning setting the correct prism for construing policy language, which can be outcome-determinative in COVID-19 business interruption cases.  A key takeaway from the article is that a court’s adherence to traditional principles of insurance policy interpretation may result in more cases finding in favor of business interruption coverage for COVID-19 related claims.  For example, relevant principles of interpretation include, among others, that policy terms are ambiguous if they are subject to more than one reasonable interpretation, and that ambiguity is construed in favor of coverage.  In COVID-19 coverage cases decided to date, these principles seem to have been lost in the binary discussion of “who is right.”  Thus, by re-centering on the need to conduct a traditional insurance policy analysis, courts will engage in a proper analysis of the issues in dispute in these cases, and policyholders should continue to gain ground in the ongoing debate regarding business interruption coverage for losses due to COVID-19.