Major Victories For Insurers In Fifth Circuit Regarding COVID-19 Business Interruption Claims

The Fifth Circuit Court of Appeals has joined seven other Circuits in finding no coverage for COVID-19 business interruption claims.

In Terry Black’s Barbecue, L.L.C. v. State Auto. Mut. Ins. Co., 2022 U.S. App. LEXIS 287 (5th Cir. Jan. 5, 2022) and Aggie Invs., L.L.C. v. Continental Cas. Co., 2022 U.S. App. LEXIS 393 (5th Cir. Jan. 6, 2022), the Fifth Circuit considered claims under all-risk policies.

In Terry Black’s Barbecue, the policy included provisions for loss of business income and extra expense. To trigger such coverages, the policy required that the suspension of operations ‘must be caused by direct physical loss of or damage to property at the premises.’

The policy’s definition of ‘period of restoration’ was the period of time that begins at the time of loss or damage and ends when the property is ‘repaired, rebuilt or replaced’ or when operations resume at a new location.

Further, the policy contained a restaurant extension endorsement providing civil authority coverage ‘resulting from the actual or alleged … exposure of the described premises to a contagious or infectious disease.’