Cygal Quoted on Business Interruption Suits Stemming from COVID-19

Partner Everett Cygal was quoted on the business interruption suits filed against commercial property insurance providers for losses stemming from the COVID-19 pandemic.

Everett said that if the courts side with the policyholders, property insurance rates are likely to increase.

“As more claims come in, premiums will go up,” he said. “It’s inevitable.”

Several states have introduced legislation that would require insurance carriers to cover COVID-19-related business interruption claims, even when the policy contracts exclude viral pandemics.

Everett said that if such legislation is passed, it could be challenged on constitutional grounds because the Contracts Clause in the U.S. Constitution says a state cannot retroactively change contracts.

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