Reflections on the Erie COVID-19 MDL: A Bittersweet Journey Through Unprecedented Insurance Coverage Territory

The recent voluntary dismissal of the Erie COVID-19 Business Interruption Protection Insurance Litigation marks the end of a significant chapter in insurance coverage law.1 As a member of the Plaintiff’s Steering Committee in this MDL, I had the privilege of working alongside some of the most talented policyholder attorneys in the country, including Kelly Iverson, Adam Moskowitz, Richard Golomb, and Jack Goodrich.

The collaborative spirit and legal acumen demonstrated throughout this litigation were truly remarkable. Our team worked tirelessly to advocate for business owners who suffered devastating losses during the pandemic. However, as the landscape of COVID-19 insurance coverage litigation evolved across the country, it became increasingly clear that courts were adopting a restrictive view of coverage for pandemic-related losses.

As I’ve previously discussed on this blog, the California and Pennsylvania Supreme Courts’ rulings against policyholders reflect the overwhelming consensus that has emerged nationwide. Courts have consistently held that COVID-19 related business interruption losses do not constitute “direct physical loss or damage” to property as required by most commercial property policies.

Yet, I still struggle with the inherent contradiction in these rulings. In a previous post, Cat Urine That Smells Bad is Covered But Not Covid, Which Can Kill You, I highlighted how courts have found coverage for cat urine odors that make properties temporarily unusable while denying coverage for a deadly virus that rendered businesses equally – if not more – unusable. This disparity in treatment between different types of invisible forces affecting property use continues to perplex many in our field.

The Erie MDL journey has reinforced a crucial lesson: Sometimes, even the strongest legal arguments and most dedicated advocacy cannot overcome the momentum of judicial interpretation. While we believed (and still believe) that COVID-19 losses should be covered under many commercial property policies, the courts have spoken with near uniformity on this issue.

Despite this outcome, I remain proud of our efforts to fight for policyholders’ rights. The legal theories and arguments developed during this litigation will undoubtedly influence future coverage disputes involving novel circumstances affecting property use and accessibility.

Looking ahead, this experience reminds us that the insurance industry and courts must grapple with evolving risks in our modern world. While COVID-19 claims may not have succeeded, the questions raised about what constitutes “physical loss or damage” in an era of invisible threats remain relevant for future coverage disputes.

To my fellow members of the Plaintiff’s Steering Committee and all counsel involved: Thank you for your dedication, professionalism, and unwavering commitment to advocating for policyholders during this unprecedented challenge. While the outcome wasn’t what we hoped for, the collaborative spirit and intellectual rigor of our efforts set a high standard for future policyholder advocacy.

For policyholders and their counsel, this litigation underscores the importance of carefully reviewing policy language and staying attuned to emerging coverage interpretations. As we move forward, we must continue pushing for clearer policy language and broader coverage options that better protect businesses from future catastrophic events.

The voluntary dismissal of the Erie COVID-19 MDL may mark the end of this particular battle, but the broader fight for fair and comprehensive insurance coverage continues. As always, we’ll keep advocating for policyholders’ rights and sharing insights on these important issues through this blog.

Thought For The Day

Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.
—Dale Carnegie

1 In re: Erie COVID-19 Business Interruption Protection Insurance Litigation, No. 1:21-mc-00001 [Doc. 311] (W.D. Penn. Oct. 24, 2024).