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Since Covid-19 sparked government-ordered shutdowns in March, judges have dismissed more than four times as many business-interruption lawsuits as they’ve allowed to proceed, according to a preliminary analysis by the University of Pennsylvania Law School. But some plaintiffs are finding weak spots in the industry’s legal defenses.

Industry executives say pandemic-related losses may be their biggest ever, and business-interruption claims will likely be part of that, even though many insurers added virus waivers to policies over the past decade following the SARS outbreak in 2003.

Most of the cases tossed out so far had virus-exclusion clauses. When policies don’t have the exclusion, insurers are arguing Covid-19 can’t cause the physical damage or loss required for a business-interruption payout, like from a tornado or flood. And the industry is winning dismissals with that argument, according to the Insurance Information Institute.
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