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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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New report shows quality of nursing home care spiked during COVID-19



TOPEKA, Kan. (WIBW) – A new report shows the quality of care afforded to residents of long-term care facilities during the COVID-19 pandemic spiked significantly.

The American Health Care Association and National Center for Assisted Living says it released a new report on Thursday, March 26, which details data on the quality of care in nursing homes during the COVID-19 pandemic.

AHCA/NCAL said the data highlights the commitment of dedicated caregivers to raising the standard of care for the benefit of residents during an unprecedented global public health crisis. The report follows data the organization issued which highlights improvements over the last decade.

The Association said the report found long-term residents in nursing homes were hospitalized 15% less during the pandemic than they were before while 8% of short-term patients saw functional improvement during the same time period.

AHCA/NCAL also aid the report found 72% of more than 110,000 infection control focused inspections of nursing homes conducted during the pandemic were deficiency-free.

The organization said the report acknowledges the devastating effects of the pandemic had on nursing home residents, however, the tragic loss of life was due to the nature of the virus, not because of inadequate care from caregivers.

Thanks to life-saving vaccines and treatments, as well as enhanced infection control, AHCA/NCAL said nursing home residents are much safer from the virus. Specifically, it said nearly 60% of nursing home resident deaths due to the virus happened during the first 7 months of the pandemic – before vaccines were available.

The Association also said COVID uniquely targets elderly patients and those with underlying health conditions, with the risk of death for those 85 and older being 340 times higher than for those ages 18 to 29.

The report also found independent research from various academic institutions overwhelmingly found a high spread of the virus in the community is correlated with outbreaks in nursing homes. At the height of the Omicron surge in mid-January, it said nursing home residents were more likely to die of complications from the virus compared to the height of the winter surge in 2020 – before the availability of vaccines.

Lastly, the report found over 730,000 nursing home residents have recovered from COVID-19.

“Our heroic long-term caregivers never wavered from our commitment to our residents during the COVID-19 pandemic,” said Mark Parkinson, president and CEO of AHCA/NCAL. “Nursing homes should be recognized for their efforts during this once-in-a-lifetime global crisis, and as we continue to focus on improving the quality of life for our residents, lawmakers and health policy officials must also work with us to implement lasting change by providing resources necessary to further enhance care.”

AHCA/NCAL said it also released a report which highlights federal data indicating the quality of care in nursing homes has risen over the past decade before the pandemic. It said the two quality reports underscore the significant strides providers have made and the continued commitment to better the lives of residents – no matter the challenges providers face.

To read the full Nursing Home Quality Improvement During COVID report, click HERE.

Copyright 2022 WIBW. All rights reserved.

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Select Kroger pharmacies join national “Test to Treat” COVID-19 Initiative



CARMEL, Ind. — A spokesperson for Kroger says 12 locations are now ready to participate in the Biden Administration’s “Test to Treat” initiative.

“Any store that has the “Little Clinic” sign with the pharmacy next door, basically,” said Eric Halvorson, a Kroger spokesperson.

White House officials announced the “Test to Treat” program earlier this month during President Biden’s State of the Union address. Back then, officials had said hundreds of COVID-19 treatment pills would be shipped out to pharmacies nationwide by the end of March.

“This is something that was created by the federal government and medical experts who were saying we needed another option to reduce the spread of COVID,” said Halvorson. “We’re making it available as quickly as we can to as many people as we can.”

Friday, Halvorson said select locations had finally received enough supplies to launch the program in their stores.

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That means Hoosiers can now go to a participating Kroger location, get a rapid COVID test, and then immediately get a COVID-19 treatment pill if they are eligible and their result comes back positive.

“If they have symptoms, they can come in and find out: Are they sick? Do they need something to reduce the severity? Because that’s ultimately another element of this is to make sure that the people who have the greatest risk of a severe condition get the treatment they need,” said Halvorson.

All 12 participating Kroger locations will carry either the Pfizer or the Merck COVID-19 treatment pill.

“That will be up to what’s delivered to the pharmacy. And everything we’re seeing right now indicates we will have plenty of supply. No reason to indicate that we would have to worry about any of that,” said Halvorson.

Officials with Kroger said only those who are considered high-risk would be eligible to get the treatment.

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According to the Centers for Disease Control and Prevention (CDC), conditions and factors that may place someone at high risk for severe COVID include, but are not limited to:

  • Cancer
  • Chronic kidney disease
  • Chronic liver disease
  • Chronic lung disease
  • Cystic fibrosis
  • Dementia or other neurological conditions
  • diabetes
  • Down syndrome
  • Heart conditions
  • HIV
  • Immunocompromised state
  • Mental health conditions
  • obesity
  • pregnant
  • Sick cell disease
  • tuxedo
  • Organ or blood stem cell transplant recipient
  • stroke
  • Substance abuse disorders
  • tuberculosis

“Providing the anti-viral agents through our Kroger pharmacy is another way that we can help reduce the spread of COVID and fight it in a different way to make people healthier and safer from the pandemic,” said Halvorson. “We just want to make sure that people have access to another treatment, another option to protect themselves, their families, and their neighbors.”

Halvorson said he strongly recommends Hoosiers call ahead to check the availability of their store before they arrive. He also urged suspected patients to book an appointment online in advance.

Lastly, if you are unable to make it in for an appointment in person, Halvorson said Kroger is also offering virtual appointments.

“If somebody isn’t able to make it into the clinic, they can go to Kroger Health online and do a telehealth visit. There will be an expert on the other end of the screen who can guide them through doing the test at home and then they would be advised about getting a prescription from there,” said Halvorson.

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Covid-19 Cases, Treatments and Omicron News: Live Updates



Credit…Aly Song/Reuters

The surge of Covid cases across China, driven by the highly transmissible Omicron variant, is straining hospitals and prompting lockdowns of neighborhoods in Shanghai, which until recently had been held up as a crown jewel in the government’s strategy for fighting the pandemic.

Shanghai, China’s largest city, has seen few cases until recently. Now, it is reporting more than 1,500 a day, and many residents are expressing anguish and dismay about China’s zero-tolerance approach to the virus.

On Friday, anger and grief welled up online after a Shanghai hospital confirmed reports that a nurse who worked there, Zhou Shengni, had died from an asthma attack after finding the doors of its emergency department shut because of Covid restrictions.

“Due to pandemic prevention needs, the emergency department of our hospital’s southern campus had been temporarily closed,” Shanghai East Hospital said on its website. Ms. Zhou’s family rushed her to another hospital, but she died late Wednesday after “attempts to save her failed,” Shanghai East said.

“Just think, this happened in Shanghai, and it was a medical worker treated like this,” read one of many comments about Ms. Zhou’s death on Weibo, a popular Chinese social media platform. “What about regular folks? Not just in Shanghai, but other parts too.”

The outbreak has fanned a rising debate in China over whether the government should rethink its stringent “zero Covid” strategy of eliminating all infections with relentless force, rather than finding a way to cope with higher levels of infection, as most countries have.

But officials across China have given no indications that the government is reworking its strategy. Instead, they insist that any easing of restrictions could exacerbate the surge of infections and further strain the medical system.

“We hope that everyone slows down their life at this time, cutting down on outings and moving around,” Wu Jinglei, the director of the Shanghai Municipal Health Commission, said at a news conference on Thursday. “Pandemic prevention in our city has entered the most critical stage.”

On Friday, Shanghai’s health commission reported that it had identified 1,609 Covid cases the previous day, 1,580 of which were asymptomatic. China has recorded over 29,000 cases so far in March. That represents a significant spike for the country, which has kept cases low since quashing the world’s first outbreak, which began in the city of Wuhan, in 2020.

The current outbreak has strained Shanghai’s medical system as hospitals and isolation hotels are crowded with patients, residents have said on social media. The city government has started issuing a daily list of hospital clinics that have suspended outpatient and elective treatments and surgeries in order to cope with the Covid cases.

Zhang Wenhong, one of Shanghai’s leading infectious disease experts, told residents on Thursday to be patient while the authorities worked to curb the outbreak.

“All of a sudden medical resources are under strain” in Shanghai, Dr. Zhang wrote in a long post on Weibo. “If we don’t counter its speed with our own, we won’t have a chance to beat the Omicron race,” he wrote, adding that the government would need to ramp up its vaccination campaign.

Beneath his post, many commenters insisted that China rethink its approach to the virus.

“Exhausting social resources, degrading the quality of life and existence, dragging down economic development and urban vitality — where’s the sense in this pandemic prevention,” one commenter wrote. “The zero-infection strategy needs thinking over.”

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