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On Appeal, Plaintiffs Lose Again On Business Interruption Claim

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September 9, 2021

The Eleventh Circuit is the second federal appeals court to rule against a plaintiff with a Covid-related business interruption claim. In this case the court rejected a Georgia dental office claim that it had to cut back operations because its office was an enclosed space where particles tended to linger and where patients and staff had to interact at close quarters. “Even so,” said the Eleventh Circuit panel, “we do not see how the presence of those particles would cause physical damage or loss to the property”. The panel invoked a 2003 precedent that denied coverage to an insured that had claimed coverage after being forced to upgrade its computer system to avoid Y2K problems. In the Georgia case, the court said the insured dental office had alleged “nothing that could qualify, to a layman or anyone else, as physical loss or damage,”

This decision is part of a clear trend in courts nationwide, according to a Claims Journal article. It cites a litigation tracker from the University of Pennsylvania’s Carey Law School that looked at Covid-related business interruption lawsuits in both state and federal courts. It found more than 2000 had been filed, and that the vast majority – 93 percent – of the 410 cases in federal courts had been dismissed. In state courts, out of 109 that had been heard, 69 percent were dismissed.

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