Trifecta For Insurers

Wisconsin became the third state supreme court in a row to rule that businesses are not entitled to insurance coverage for losses resulting from the pandemic and government-imposed restrictions on gatherings. The decision was unanimous. It reversed a lower court that allowed a proposed class action on behalf of businesses insured by Society Insurance that sought coverage for losses under several clauses, including business-income interruption. The Supreme Court ruled that indoor dining restrictions and the presence of the virus within restaurants didn’t trigger coverage. Justice Rebecca Frank Dallet, writing for the 7-0 court, said the presence of COVID-19 cannot constitute a physical loss of property or damage to property because the virus does not alter a property’s appearance or structure. In April, the supreme courts of Massachusetts and Iowa reached the same conclusion in interpreting property insurance policies by other insurers.