Economic Issues in Calculating Damages in COVID-19 Business Interruption Insurance Lawsuits
As the COVID-19 pandemic continues to affect economy activity across the US, a wave of litigation has emerged. Hundreds of lawsuits in federal and state courts across the country are pitting businesses against insurance companies in business interruption insurance coverage cases. Although the specific allegations in these cases vary, in general plaintiffs claim that their insurance policies provide coverage for business income losses due to coronavirus-related interruptions and aim to recover lost profits among other damages. These proceedings include a large number of class actions, with the Judicial Panel on Multidistrict Litigation considering petitions to centralize federal suits.
In this article, published in Law360, Edgeworth Principal Consultant Dr. David Colino discusses a framework for economic analysis in COVID-19 business interruption insurance lawsuits that can help courts both estimate the relevant damages at issue and consider the appropriateness of plaintiffs’ claims for collection action.