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McKool Smith principal Michael Miguel shared his view on the Always Smiling Productions LLC v Chubb National Insurance Co case in Law.com article. Always Smiling Production filed suit alleging Chubb refused to pay its business interruption claim in connection with COVID-19 related shutdowns as there’s direct or physical damage. Michael explained, “While this is not the first coverage case in the industry, it is the first to raise the issue of whether an insured must await actual death, injury or sickness to seek coverage, or whether mitigation measures that prevent the injury in the first place should be covered…. To date, insurers have the clear upper hand in terms of decisions of COVID insurance claim lawsuits, with a majority of rulings finding the absence of actual physical damage to property defeats coverage. It will be interesting to see how a court grapples with the prospect of requiring a production company, faced with a pandemic that caused 600,000 deaths, ceased operations before such severe personal injury could affect its key employees.” Read the article here.

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