By Alexis Preskar & Brett Krantz

Businesses and attorneys are anxiously watching the courts for a decision on whether insurers will be forced to pay for COVID-19 related losses. Recently, a federal court in New York found that coronavirus does not cause the physical damage needed to trigger insurance coverage.

Many businesses that have been forced to close or severely restrict their services have turned to their insurance companies for coverage. But the insurance companies have been issuing blanket denials, claiming COVID-19 does not cause physical damage to property, among other arguments. Read more about the background of these claims here.

In an effort to force coverage, many businesses have taken their insurers to court, and those cases are expected to wind through the system for months to years before we get a final result. However, one court gave an early indication of how other courts may rule. In Social Life Magazine Inc. v. Sentinel Insurance Co. in the federal court for the Southern District of New York, a publishing company sued its insurer for failing to provide coverage since the business was closed due to COVID-19. It also brought a motion for preliminary injunction to force its insurer to pay immediately, rather than waiting years for a judgment. In order to get a preliminary injunction, a party has to show a likelihood of success on the merits, i.e. show that there’s a good chance they will ultimately win the lawsuit. In Social Life, the judge found the publisher was not likely to win because coronavirus does not cause physical damage to the property. The judge found that the virus is different than mold or Legionnaires’ disease, and said even though a person could become infected by touching a coronavirus-covered surface at the business, that is damage to the person who gets sick, not the property itself. While the judge noted her sympathy for businesses suffering from COVID-19 losses, she found that insurance wasn’t the answer under New York law.

To be clear, the Social Life case is based on New York law and so will not control in Ohio. But it is the first court denial we’ve seen in these types of cases. KJK will continue to monitor these cases and update on new developments. If you have any questions about coverage under your policy, contact Brett Krantz at or 216.736.7238, Jim Sammon at or 216.736.7235 or Alexis Preskar at or 614.427.5748, or reach out to any of our Litigation professionals.