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Uphill Battle Awaits COVID-19 Business Insurance Claimants as the Debate Moves up to Appellate Courts | Burr & Forman



A majority of the legal proceedings that have resolved property insurance claims related to COVID have found that coverage will not be triggered without direct physical loss or property damage. The insurance industry is now waiting to see whether this also applies at the appointment level.

As the pandemic subsides, the number of COVID-related insurance claims in American courts is also decreasing. A fair number was initially filed by business owners seeking income replacement during the temporary government-ordered shutdowns, which peaked in mid-2020. However, the predicted tide of such cases has slowed to a trickle for practical and legal reasons. Many business owners have had healthy incentive payments to replace their lost income and cover their overheads, such as the Paycheck Protection Program (“PPP”). Perhaps more importantly, US courts in most jurisdictions have now considered whether such state-ordered closings and the resulting economic losses are covered by a standard property insurance policy in the absence of actual property damage. The key message in such policies is “direct physical loss or damage to property”. An overwhelming majority of the courts have stated that this requires specific physical harm; a mere temporary closure of shoppers or restaurants is not enough, even if ordered by the government for reasons of public safety.

According to the Covid Coverage Litigation Tracker, the win rate for insurers in this area is high.[1] a website published by the University of Pennsylvania Carey Law School. The website reports that around 80-90 percent of all Covid-19 property insurance cases have resulted in termination.[2]

The overwhelming majority of the courts have ruled that such cases should be dismissed in the absence of actual property damage. These include “business income,” one of the partial covers offered under property insurance, when the business needs to be closed to “repair” or “restore” its physically damaged property. It still requires “direct physical loss or damage to insured property” (or similar language) for any coverage. An example is a tornado damage to a retail store; the policy would cover repairs to the store plus loss of income while it was being closed for repairs. Thus, such “business income” coverage differs from “business interruption” insurance, although it is often mistakenly confused. The “business income” cover is only one component of a classic property insurance claim, which includes real property damage.

Court after court has ruled that property insurance only covers “income” during a period of “restoration,” “repair” or “replacement” of physically damaged property – another indication that the policy is actual loss of or damage to property of the insured, not just financial loss. In deciding this question, many courts have relied on the Merriam-Webster dictionary’s definitions of words such as “physical” (having material existence and, above all, perceptible by the senses and subject to the laws of nature); “Loss” (“Destruction or Ruin”); and “Damage” (“Loss or damage resulting from injury to persons, property or reputation”). An Alabama federal court found, “You cannot rip the adjective ‘physical’ out of the noun that modifies it ‘loss’.” A common understanding of the term would be “a material, perceptible destruction or ruin of property.”[3]

The few exceptions where a policyholder has enforced a dismissal motion mainly centered around whether a pandemic-triggered closure can be a literal “physical loss,” but most courts won’t buy it.[4] Some others have allowed a policyholder to file a Covid-19 lawsuit (with insurers’ dismissals overturned) that made an explicit factual allegation of COVID contamination and sick employees.[5] In none of these cases, however, has the question of whether the policy nevertheless excludes coverage, for example excluding coverage for “acts or decisions” by a government agency. The cases in which a court has ruled that economic loss (without accompanying physical damage) was sufficient have generally been rejected and not pursued by other courts.[6]

The existence of a virus exclusion, such as ISO form CP 01 40 07 06 “Exclusion in the event of loss through viruses or bacteria”, has offered courts an easy way out in the cases in which they exist. However, the opposite is not the case – that the absence of virus exclusion means the presence of coverage. Courts dealing with this issue continue to believe that the policy requires an initial case of actual property damage before the exclusions (including virus exclusions) even come into play.[7]

Perhaps this litigation will reach a turning point with more than 120 cases pending appeal in 25 states.[8] Every U.S. appeals court is now dealing with this issue, as are several state appeals courts, including Ohio and Oklahoma. Although the treaty interpretation rules of the individual states have nuances, their regulations have so far been surprisingly uniform. However, until the final decision on the appellate body has been made, the insurance industry will take the issue seriously, as there is a potential danger if the courts should decide that an official can essentially order insurance benefits with the stroke of a pen. Property insurance, it is said, is only intended for property damage.

Stay tuned for updates from the Burr team as these matters find their way through the appeal process.


[2] See Law360, Erin Badham and Keith Moskowitz, Outliers Offer False Hope For Virus Biz Interruption Claims, (April 14, 2021), available at: -for-virus-biz-interruption-claims (last visited on May 25, 2021). The COVID litigation tracker only considers cases that can be found publicly, with government legal documents being less readily available.

[3] Woolworth LLC v Cincinnati Ins. Co., No. 2: 20-CV-01084-CLM, 2021 WL 1424356, * 3-4 (ND Ala. April 15, 2021)

[4] See Café International Holding Company v. Westchester Surplus Lines Insurance Company, Case No. 20-21641, 2021 WL 1803805, * 1 (SD Fla. May 4, 2021) or in the community as a whole does not cause “direct physical loss or harm”.)

[5] See, e.g., Studio 417, Inc. v Cincinnati Insurance Company, No. 6: 20-cv-03127-SRB (WD Mon Aug 12, 2020); Serendipitous, LLC / Melt v. Cincinnati Ins. Co., No. 2: 20-CV-00873-MHH, 2021 WL 1816960, at * 1 (ND Ala. May 6, 2021)

[6] See Henderson Road. Rest. Sys., Inc. v Zurich Am. Ins. Co., No. 1: 20-CV-1239, 2021 WL 168422 (ND Ohio 2021); Podiatry Foot and Ankle Inst. PA versus Hartford Ins. Co. of Midwest, No. CV2020057KMESK, 2021 WL 1326975, at * 3, n.3 (DNJ April 9, 2021)

[7] Bel Air Auto Auction, Inc. v Great Northern Ins. Co., No. RDB-20-2892, 2021 WL 1400891 (D. Md. Apr. 14, 2021) (Bennett, J.) (Insurer’s motion for a decision on the pleadings in a COVID-19-related insurance claim and rejection of the plaintiff’s argument that the Absence of virus exclusion indicates coverage).

[8] See Bronstad, Amanda, Legal Fight Over COVID-19 Insurance Coverage Heads to Appella Courts, available at head-to-appellate-courts /? slreturn = 20210425130030 (last visited on May 25, 2021)

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Mayor Bronson in quarantine after head of Anchorage Community Development Authority tests positive for COVID-19



Mayor Dave Bronson is in quarantine after coming into close contact with Mike Robbins, executive director of Anchorage Community Development Agency, who has now tested positive for COVID-19.

The mayor’s office confirmed on Monday that Robbins was infected with the virus and that Bronson is under quarantine.

Mayor spokesman Corey Allen Young said Bronson was following the city’s COVID-19 containment policy and would be in quarantine for six days and will be tested for the virus on day six.

Nobody else in the mayor’s office came in close contact with Robbins, Young said.

“Nobody else has tested positive or shown any signs of symptoms,” he said via email, adding that the mayor works from home.

Bronson was in close contact with Robbins at a Visit Anchorage event last week. Two other members of the administration were in attendance but had no long close contact with Robbins, Young said.

This is the second time this month that the mayor has been quarantined after close contact with a COVID positive member of his administration. Community leader Amy Demboski and community attorney Patrick Bergt tested positive for the virus earlier this month.

[Anchorage Assembly calls on Mayor Bronson to enforce mask mandate]

On Monday, Bronson gave the Anchorage Chamber of Commerce an “Address of the State” – from Zoom – during the organization’s “Make it Monday” forum.

“Please again accept my apology for not being there in person as I am falling (under) quarantine protocols,” Bronson told the audience.

The mayor has avoided strongly encouraging the wearing of masks or advocating vaccinations, both of which have been shown to reduce virus transmission and the risk of serious illness. Instead, he often leaves Dr. Michael Savitt – his Chief Medical Officer at the Anchorage Department of Health.

Speaking at the chamber’s forum on Monday, Bronson said the city health department’s top priority is coordinating the city’s response to COVID-19, including “advanced testing, targeted vaccinations and monoclonal antibody treatments for improved and targeted treatments, especially in our underserved communities . ”

Now “we are working to return to pre-COVID-19 service levels while returning to all of the traditional services that the Anchorage Department of Health normally provides,” Bronson said.

The health department has also focused on the city’s mass housing, including communal housing in the Sullivan Arena and out-of-community housing, he said.

Combating homelessness remains a top priority for his government, said the mayor.

“We continue to work with the congregation to develop adequate service capacity for those affected by homelessness in our city and will shortly be launching an initiative to reduce the scare-mongering on our streets,” said Bronson.

The pandemic was largely a footnote in Bronson’s Monday statements to the chamber. He highlighted his government’s other priorities: working with the Assembly to approve a budget for the next year; Replacing aging docks, broken piles and other infrastructure challenges in Port of Alaska modernization program; and promoting economic growth in the city, among other priorities.

The news of Robbin’s positive test result – and Bronson’s quarantine – comes as Anchorage struggles with persistently high virus transmission rates across the community, part of a spike that increased dramatically in late summer and was fueled by the highly contagious Delta variant.

Bronson had a mild bout of COVID-19 last fall and suffered long-term symptoms, he said.

[What’s bringing people to Anchorage’s COVID-19 vaccine clinics: Work mandates, high case counts and good timing]

The Mayor firmly opposes COVID-19 restrictions, including the city’s current Masking Ordinance, which the Anchorage Congregation passed earlier this month. Bronson vetoed the ordinance requiring the wearing of masks in indoor public spaces, but the congregation quickly voted to lift the veto.

Bronson and most of his administration have attended congregational meetings unmasked since he took office. The Emergency Mask Ordinance exempts Bronson and its administration from the requirement, and members said the ordinance was not about getting the mayor to wear a mask, but rather about protecting public health and safety.

Bronson has spoken out against vaccination regulations and against vaccination regulations for staff in local hospitals. In his campaign, at Congregation gatherings and other public forums, he downplayed the severity of the pandemic and its impact on hospitals.

Robbins did not immediately respond to a request for comment. Young didn’t immediately respond to a question about whether Robbins had symptoms.

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Gov. Pritzker to Give COVID-19 Update, Discuss Pediatric Vaccinations Monday – NBC Chicago



NOTE: NBC Chicago will be streaming the governor’s address live starting at 1:30 p.m. CT. See it live in the player above.

Illinois Governor JB Pritzker is expected to give a COVID-19 update on Monday, which is expected to be a day before an FDA panel on pediatric vaccination to discuss whether Pfizer child-size vaccinations for children ages 5 through 11 years should be recommended or not.

The governor is expected to speak from the Thompson Center in Chicago at 1:30 p.m.

The governor’s address comes shortly after the White House announced that children ages 5-11 can get a COVID-19 shot at their pediatrician office, local pharmacy, and possibly even school, which the plans state Elementary school children will be listed for the expected approval of the Pfizer shot in a matter of weeks.

This week will be an important step in getting COVID vaccines approved for such age groups.

The Food and Drug Administration’s panel of experts will discuss Tuesday whether the Pfizer shots are ready for the roughly 28 million children ages 5-11.

Federal health officials said late Friday that child-sized doses of Pfizer’s COVID-19 vaccine appeared to be highly effective in preventing symptomatic infections in elementary school children and did not cause any unexpected safety issues.

In their analysis, FDA scientists concluded that the vaccine’s benefits in preventing hospitalizations and death from COVID-19 would outweigh any serious potential side effects in children in almost any scenario. But the agency’s reviewers stopped asking for Pfizer’s shot to be approved.

If the FDA approves the syringes, the Centers for Disease Control and Prevention will make additional recommendations on who should be given them in the first week of November. Children could start vaccinations early next month – with the first children in line, fully protected until Christmas.

Full-strength Pfizer syringes are recommended for ages 12 and up, but pediatricians and many parents are eagerly awaiting protection for younger children in order to contain infections from the extra-contagious Delta variant and keep the children in school. Both Moderna’s and J & J’s vaccines can only be used in people aged 18 and over, although Moderna is also researching its vaccines in elementary school children.

While children are at lower risk of serious illness or death than the elderly, COVID-19 has killed more than 630 Americans under the age of 18, according to the CDC. Almost 6.2 million children contracted the coronavirus, more than 1.1 million in the last six weeks when the Delta variant increased, says the American Academy of Pediatrics.

Doctors at Advocate Children’s Hospital said last week that while children’s cases tend to be less severe than adults, “more children are hospitalized with severe COVID-19 infection than earlier in the pandemic”.

The group also warned that multiple cases of a life-threatening COVID-19-related illness called Pediatric Multisystem Inflammatory Syndrome have been reported in the Chicago area, and that experts are still unaware of the long-term effects of COVID-19 on children.

The Biden government has bought enough child-sized doses – in special orange-capped vials to distinguish them from the adult vaccine – for the country’s 5-11 year olds. When the vaccine is approved, millions of doses, along with child-sized needles, will be shipped across the country in an instant.

More than 25,000 paediatricians and general practitioners have already signed up to receive the syringes in little arms.

Pfizer and Moderna are also investigating vaccinations in even younger toddlers up to 6 months old. Results are expected later in the year.

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Wasted COVID-19 vaccine doses exceed 50% for some Erie County providers



UPMC Hamot and Albion Pharmacy wasted almost the same number of COVID-19 vaccine doses. Hamot disposed of 384 unused doses while Albion Pharmacy disposed of 376 doses.

The difference is that Hamot received 66,105 doses of vaccine, which is only 0.6% of its vaccine wasted, while Albion Pharmacy received 550 doses of vaccine, of which 68.4% was wasted.

“When we first ordered the vaccine, the only way to order it was to get 450 doses from Pfizer,” said Megan Dreher, manager of Albion Pharmacy. “We didn’t have any special refrigeration to store it, so the vaccine was only good for six weeks. There just wasn’t much demand. We even tried to get to schools.”

COVID-19 vaccine waste was a major issue earlier this year when demand was high and the vaccine was in short supply. Hamot and other providers have taken exceptional measures to use each dose, including driving to people’s homes after a vaccine clinic closed for the day to give extra doses.

Now there are enough vaccines and the demand has decreased. Still, vaccine providers don’t want to waste doses.

“I continue to believe that vaccine waste is a big deal,” said Melissa Lyon, director of the Erie County’s Department of Health. “This is a very powerful vaccine and we don’t even want to waste a single dose.”

More:COVID-19 vaccine required for Penn State Behrend faculty, staff until December 8th

The county health department disposed of 4,192 of its doses – 14.4% of the 29,060 received – without administering them. According to the Pennsylvania Department of Health, this is the highest number of wasted doses of any vaccine supplier in Erie County.

A total of 1,414 of these doses were spoiled, while a further 2,771 doses were not administered after opening the vial. Other ways to waste doses are if the vial is broken or if the vaccine is drawn but not given within a period of time, usually two to 12 hours, depending on the type of vaccine.

“One thing that happened was when the state ordered walk-ins to be accepted in vaccination clinics,” Lyon said. “That took control out of you to avoid any waste. If someone wanted a dose, you had to open a vial (with six or ten doses), even if no one else got a syringe. “

More:Erie Hospitals See More Breakthrough COVID-19 Patients, With Nearly 30% Fully Vaccinated

Officials from Adagio Health, a Pittsburgh-based health organization whose clinics primarily serve women and low-income residents, offered a similar explanation for the high percentage of wasted vaccine doses in their Erie County offices.

Its Erie and Edinboro offices disposed of 1,695, or 59.2%, of their combined 2,860 cans.

“When we completed our training with the state health department about the vaccine, they emphasized the importance of putting doses in people’s arms,” ​​said Natalie Crouse, senior director of clinical operations at Adagio Health. “Vaccinating one person and having to dispose of the other five doses in one vial is better than leaving the vial in the refrigerator and letting all six doses expire.”

Larger vaccine providers have wasted little vaccine

Other providers have been able to staff clinics and complete walk-in appointments without wasting a lot of vaccine.

Saint Vincent has set up remote clinics in addition to providing COVID-19 vaccines in the hospital and recently in its doctor’s offices and emergency centers. It wasted 894, or 1.3% of its 70,205 doses.

“Remember, some of those doses weren’t actually wasted,” said Steve Henderson, director of Saint Vincent Pharmacy. “If you look at the ‘other’ category of wasted cans, it includes inexplicable ones. The Food & Drug Administration approved six doses from each Pfizer vial, but none of them contain six doses, so you had to report one as unaccountable. “

Hamot has kept the percentage of doses wasted low, in part because it has the vast majority of its vaccination clinics in one location – the UPMC Health Plan Operations Center, 380 E. Bayfront Parkway.

“But we have held remote clinics and have been very vigilant from the start,” said Jason Chenault, Hamot’s director of emergency, hospital and critical care services. “We continue to focus precisely on the dosages and how many are planned. When we have additional doses, we reach out to the appropriate people to administer them.”

Here’s a look at the number and percentage of wasted vaccine doses from Erie County vendors who disposed of at least 200 doses without administering them:

  • Albion Pharmacy – 376 doses wasted, 68.4% of all doses received
  • Adagio Health, Erie, and Edinboro offices – 1,695, 59.2%
  • Erie County Jail – 269, 22.8%
  • Millcreek Manor Pharmacy – 1,601, 19.4%
  • Erie County Department of Health – 4,192, 14.4%
  • Millcreek Community Hospital – 1,450, 13.7%
  • St. Vincent Hospital – 894, 1.3%
  • UPMC Hamot – 384, 0.6%

Nationwide, vaccine providers wasted 0.28% of their doses, according to the state health ministry.

One way to avoid waste in the future is for vaccine manufacturers to sell syringes filled with a single dose of the vaccine, Lyon said.

“It’s more expensive to make, but it would reduce waste,” said Lyon.

Contact David Bruce at Follow him on Twitter @ETNBruce.

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