Unprecedented Business Disruptions Caused by the COVID-19 Crisis

Unprecedented Business Disruptions Caused by the COVID-19 Crisis

By Daniel O. Dietchweiler  and Marc H. Pillinger. Unprecedented business disruptions caused by the COVID-19 crisis have shuttered many non-essential businesses including retail stores, restaurants, office buildings, and other commercial premises. These are extraordinary times and the government has heightened protections relating to transmission of the virus during this pandemic by taking extraordinary measures. As the impact of the COVID-19 pandemic continues to evolve, businesses should carefully consider the issues that are likely to play a significant role in the short and long term which may be the subject of disputes and litigation to come. Early retention of counsel to assess these issues may help to reduce litigation risk. The COVID-19 crisis has undermined stock markets, dropped bond markets to historically low yields, and threatens to undermine the world economy in ways not seen since the Great Depression. It is fair to foresee our society undergoing devastating economic dislocation both in the commercial sector and to consumers. As a result, some state and local governments have imposed emergency measures intended to separate people in an effort to mitigate transmission of the virus. Many businesses in the “non-essential” service sector have shifted from office based business operations to remote home based work environments. Though this creates a safer environment for our society to work through this crisis, it nevertheless will result in contractions throughout the economy generally. Thus, businesses may face threats to their very existence and in such times, this crisis may lead struggling businesses to make first party claims for business interruption under their existing policies. Business interruption coverage is added to a commercial property policy when an...