Alaska Supreme Court says most business insurance doesn’t cover COVID-19 damages

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Alaska was the last state to decide whether common commercial insurer policies would cover harm businesses suffered in the COVID-19 pandemic.

Alaska Supreme Court Justice Jude Pate, right, asks a question during oral arguments in a case concerning correspondence education allotments, on June 27, 2024, in the Boney Courthouse in Anchorage. that the COVID-19 pandemic does not qualify as “physical loss” or “damage” under common commercial insurance policies.

The court’s decision, rendered unanimously, has major financial implications: If the court had decided differently, the ruling could have allowed businesses to collect millions of dollars from their insurance policies to cover the costs of COVID-mandated closures and health restrictions. , the American Property Casualty Insurance Association said insurance premiums would rise as a result if insurers were required to pay out more.

Baxter challenged the denial in state court, and the insurer moved the case to federal court, which then asked the Alaska Supreme Court to decide whether the presence of COVID-19 constitutes “direct physical loss” or “damage” to property, and whether governmental orders pertaining to “Our answer to both questions is ‘no,’” Carney wrote in Friday’s published order.

 

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Alaska Supreme Court says most business insurance doesn’t cover COVID-19 damagesThe decision likely means that insurance companies will not have to pay most claims related to business losses caused by COVID-19.
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