The Supreme Court of Virginia on April 14, 2022, declined to review a pandemic-related coverage case brought by a group of hotels against two insurance companies. On the same day, the 4th Circuit U.S. Court of Appeals ruled in favor of an insurance carrier in a Maryland sports and entertainment developer’s $500 million appeal for coverage of COVID-19 losses. It marked the second time the 4th Circuit has ruled in favor of insurance carriers in a pandemic-related coverage case. Significantly, however, neither Fourth Circuit case involved Virginia law.
Fender, a Richmond litigation partner who represents policyholders in insurance recovery claims, told Law360 the 4th Circuit rulings won’t have importance under Virginia law. He said “there is still an open path” to COVID-19 business interruption claims in Virginia. Because these are state-by-state issues, he said, “we’ll have to wait and see” for an ultimate outcome under Virginia law.
Law360 reported that attorneys for insurance carriers contend that business interruption policies were not designed to cover pandemic-related claims without physical loss or damage to property. But Fender maintained that business owners “faithfully paid premiums only to be left in the lurch by their carrier when the pandemic hit.”
Fender said most of his clients who were ready to file business interruption claims have done so. But Virginia has a five-year statute of limitation for contract claims.
“Others are keeping their powder dry and waiting for the case law to develop,” said Fender, a member of McGuireWoods’ insurance recovery team.