As of May 2020, 101 lawsuits seeking coverage from COVID-19 damages have been filed in federal court with that number expected to climb into the thousands, according to Claims Journal.  The 101 cases, which exclude suits filed in state courts, rally around determining whether COVID-19 should trigger business interruption coverage due to government mandated closures of businesses such as restaurants, beauty salons, daycares, and other storefronts. Richard Golomb, a partner with the Golomb & Honik law firm in Philadelphia, noted that insurance companies have been denying business interruption claims associated with COVID-19 as most policies do not explicitly cover viral pandemics. According to the American Property and Casualty Insurance Association, closures are costing businesses with less than 500 employees an estimated $393 billion to $668 billion per month. Some small business owners are relying on these claim payouts as a last resort to keep the doors open, especially given capacity restrictions that continue to impact revenue generation even after closure mandates are lifted.

On May 21st 2020, the House Small Business Subcommittee on Innovation and Workforce Development hosted a virtual forum to address business interruption insurance claims. During the forum, Chairman Jason Crow stated that “it is incumbent upon Congress, and especially this Committee, to work with affected policyholders and interested stakeholders to chart the appropriate path forward. The alternative, where small businesses do not get any relief, resulting in permanent business closures and job losses, is unacceptable.” Bills to require insurers to pay out COVID-19 related business interruption claims to small businesses have been introduced by seven state legislators according Holland & Knight. Similarly, federal legislation has been introduced in the U.S. House of Representatives. The Business Interruption Insurance Coverage Act of 2020 seeks to require business interruption policies to cover losses related to viral pandemics, forced closure of businesses, and power shut offs conducted for public safety purposes.

While the specifics of how insurance policies will aid small business owners in their recovery efforts from COVID-19 remain uncertain, it is clear that the economic impact of this this global pandemic will shape the specifics of business interruption insurance for the foreseeable future.