Last week, the first lawsuit was filed seeking insurance coverage for business-interruption due to losses caused by COVID-19. The case, Cajun Conti, LLC, et al. v. Certain Underwriters at Lloyd's of London, ,et al., was filed in Louisiana. A New Orleans restaurant, Oceana Grill," seeks a declaratory judgment that its "all risks" policy issued by Lloyd's covers losses resulting from the closure of its restaurant due to the Governor's order restricting public gatherings and the Mayor of New Orleans' order closing restaurants. 

    The lawsuit contends that "contamination of the insured premises by the coronavirus would be a direct physical loss needing remediation to clean the surfaces of the establishment." The lawsuit further alleges the policy contains no exclusions for a "viral pandemic." The suit seeks a declaration that "the policy provides coverage to plaintiffs for any future civil authority shutdowns of restaurants in the New Orleans area due to physical loss from coronavirus contamination and that the policy provides business income coverage in the event that the coronavirus has contaminated the insured premises." The obvious dispute will be whether the coronavirus  constitutes a "direct physical loss or damage" as required by the policy.

    Assuming there is "direct physical loss," the policy provides coverage for loss where "future civil authority shutdowns of restaurants in the New Orleans are due to physical loss from coronavirus contamination." Further, the policy provides "business income coverage in the event that the coronavirus has contaminated the insured premises."

    This is the first of what promises to be many lawsuits filed by businesses for losses caused by COVID-19.