Business Interruption Claims and the Coronavirus Pandemic

Last week, a New Orleans restaurant filed what is believed to be the first lawsuit in the United States seeking insurance to cover losses from government-mandated closures due to the Coronavirus pandemic. As with many other claims, the primary dispute turns on the coverage provided under the “civil authority” provision. That coverage, in turn, may hinge on still developing science on how long the virus can remain in properties.

Oceana Grill argued in its complaint that the civil authority prong of its “all risk” property policy with Lloyd’s of London should cover its lost revenue after Louisiana issued a statewide order that sharply limited the size of public gatherings and required restaurants to stop on-site dining. This scenario has played out all across the country, especially in the past two weeks, as federal, state, and local orders have issued restricting the size of public gatherings and shuttering countless businesses. Many business are expected to grapple with the issue in the coming days, weeks, and months.

Like many civil authority provisions, the Lloyd’s of London policy requires that a government restriction stem from a “direct physical loss” — or damage — to a nearby property for coverage to apply. The restaurant appears to contend that this requirement was met when Louisiana’s governor and New Orleans’ mayor outlined their concerns that the Coronavirus could contaminate and damage public spaces.

The civil authority provision in many “all risk” policies requires that there be an actual direct physical loss. This loss requirement is unresolved, as the unsettled  science around the Coronavirus evolves on a near daily basis. There is no consensus in the scientific community regarding how long the Coronavirus can survive on surfaces or materials. One study issued  by the New England Journal of Medicine indicated it can survive on cardboard for up to a day and on plastic and stainless steel for up to 72 hours.

As policyholders and insurance companies get more involved in litigation over civil authority coverage disputes, they may well turn on factors currently unknown. Parties are likely to turn to scientific experts to determine if, and how long, the Coronavirus contaminated buildings. This may be influenced by the virus’s lifespan on a surface, as well as the risk of future re-contamination. In other words, re-contamination might constitute a continually renewing physical loss. Others may contend that the loss of functionality of a building is sufficient to constitute physical loss.

In the upcoming days, weeks, and years, businesses and individuals may suffer many billions of dollars in damages – some of which may be recoverable in court. Berg Plummer Johnson & Raval, LLP is available to assist you with business interruption claims with your insurers. To help to determine how to address your business interruption insurance claim and whether your coronavirus claim is actionable, call us at (713) 526-0200 or contact us online.

Force Majeure Contract Clauses and the Coronavirus Pandemic

With the rapid decline in the world economy as a result of the coronavirus/COVID-19, businesses of all kinds are experiencing interruption unprecedented since the Great Depression. Contracts of sale, transport, employment – all kinds of transactions are affected. Some contract terminations will be excused, others unlawful.

Many “cancelled,” or breached contracts may be excused because of what’s known in law as force majeure, a force which prevents compliance. In some cases, parties may use the outbreak as a pretext to breach contracts with which they may otherwise be obligated to comply. In other cases, the outbreak may serve as justification for the cancellation of a contract.

In the upcoming days, weeks, and years, businesses and individuals may suffer many billions of dollars in damages – some of which may be recoverable in court. Likewise, business and individuals may be party to a contract which they believe they are prevented from performing. Berg Plummer Johnson & Raval, LLP is available to assist you in bringing, defending, or advising you concerning any contract claim or concern you have. To help to determine how to address your contracts and whether your coronavirus claim is actionable, call us today at (713) 526-0200 or contact us online.

How to Apply for Disability Benefits During the Coronavirus Pandemic

Although many Americans have been and will be affected by COVID-19, there is an available resource: long-term disability insurance. Long-term disability benefits are intended to replace your earned income for an extended period of time. While short-term disability benefits may expire after six months, long term disability benefits often last until retirement age (i.e., age 65 or older) or until you have sufficiently recovered so that you can return to work. The assumption of long-term disability coverage is that the long-term disability at-issue will not necessarily be fully resolved. If you do recover within a limited timeframe, then short-term disability benefitscan assist during that time.

For example, if you contract COVID-19 in Houston or elsewhere, you may qualify for short and/or long-term disability insurance coverage. Insurers may attempt to lower their payouts by arguing that your health condition is such that you are only partially disabled, not fully disabled. If you are capable of working a lower-paying job, then the insurer will assert that you should work in the alternative position and they will pay out lower benefits or no benefits as a result. Some insurers may even argue that you are fully capable of working your job from home and thus are not disabled at all. With the aid of a skilled Houston long term disability lawyer, however, you can demonstrate that you are not able to work in your own occupation and are still qualified to receive full benefits.

CORONAVIRUS BACKGROUND: 

According to the Center for Disease Control, Coronavirus (COVID-19) is a family of viruses that is spreadable from person to person. Coronavirus is believed to have been first detected in a seafood market in Wuhan, China in December 2019. If someone is sick with Coronavirus, the symptoms they may show include mild to severe respiratory illness, cough, and difficulty breathing.


Although there is not yet a vaccine, the CDC suggests the following precautions, along with any other respiratory illness:

  • Avoid close contact with people who are sick.
  • Avoid touching your eyes, nose, and mouth.
  • Stay home when you are sick.
  • Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
  • Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.
  • Wash your hands with soap and water for a minimum of 20 seconds. 

We encourage you to follow all government recommendations to practice social distancing, limit contact with others, and ensure that the elderly and immune compromised in our society are not exposed to Coronavirus. If we can ever be of assistance with your disability claim, please contact us. We are all in this together.

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