Constitutionally Permissible? Can States Require Insurers To Pay Business Interruption Claims Due to Government-Imposed Business Closures?

New York and Hartford Partner Alan Levin co-authored an article for New York Law Journal examining recent developments in the business interruption insurance landscape, including state legislative response and the general constitutional analysis of contract impairment claims, providing some guidance as to how courts may handle these challenges.

Levin address the legal battle businesses face in recouping business interruptions amid the COVID-19 pandemic. They note, “Various aspects of insurers’ rights to contract are impacted. Not only will new and renewal policies be prohibited from excluding pandemic related losses, the heart of the issue is the retroactive effect on currently in-force policies.” The authors suggest that “to succeed, insurers will need to state their claims more broadly.”

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