Should "all-risk" insurance policies cover business losses related to COVID-19? Mike Davis, chair of Venable’s COVID-19 Task Force, was quoted in Food & Wine on litigation surrounding insurance companies' failure to pay out insurance claims filed by restaurant owners who suffered losses as a result of the pandemic.
According to the article, insurance companies are taking their case to Congress, effectively arguing that they can't afford to pay restaurants. Furthermore, they're stating that their policies were never meant to cover something as ubiquitous as COVID-19—despite, in some cases, language to the contrary.
For example, some restaurants have an "all-risk" policy with their insurance company that promises to cover entirely unknown and novel risks that may arise which were not previously considered by the company. Nonetheless, insurance companies have refused to pay for business interruption losses.
This type of denial of claim is a clear breach of contract, lawyers allege. All-risk policies are "supposed to cover every single risk," said Davis. "It doesn't matter if it's a risk no one ever heard of. It doesn't matter if it's Martians coming down from Mars. Unless it's specifically excluded, you've got to cover it."
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