“Regulatory Estoppel Does Not Invalidate the Virus Exclusion,” Law360

“Regulatory Estoppel Does Not Invalidate the Virus Exclusion,” Law360

“As the insurance industry confronts a tidal wave of COVID-19-related business interruption claims and litigation across the country … [p]olicyholders have begun to mount a defense to the application of the virus exclusion” common in business interruption policies, Goldberg Segalla’s Jonathan L. Schwartz and Colin B. Willmott explain in Law360.

In their article, Jonathan and Colin—members of the firm’s Global Insurance Services practice based in Chicago—address the “regulatory estoppel” theory, which has garnered attention recently as an argument policyholders have advanced to defeat the virus exclusion in COVID-19 business interruption coverage cases.

Jonathan and Colin argue that “[t]he history of the virus exclusion does not invite application of the seldom-used regulatory estoppel theory because there was no misrepresentation to the regulators, let alone a material one with respect to property coverage for pandemics. Moreover, this argument against the virus exclusion would undermine the value of formal clarifications of insurance policy intent.”

Global Insurance Services partners Eric A. Fitzgerald, based in Philadelphia, and Jared T. Greisman, based in Manhattan, Newark, and West Palm Beach, also contributed to the article.

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