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The U.S. Judicial Panel on Multidistrict Litigation on Friday agreed to consolidate business interruption litigation filed by businesses against a Wisconsin insurer, but refused to do so against several other insurers, saying it would be inefficient.
The MDL ruling follows the panel’s decision in August in which it said that centralizing all the COVID-19 business interruption litigation would not work because of differences between policies, among other factors, but that combining ligation against individual insurers may be feasible.
The MDL said in its ruling on Fond du Lac, Wisconsin-based Society Insurance Co., in In re: Society Insurance Co. COVID-19 Business Interruption Protection Insurance Litigation, that centralizing the litigation “will serve the convenience of the parties and witnesses and further the just and efficient conduct of this litigation.” Society has had 34 lawsuits filed against it, with 22 of them pending in U.S. District Court in Chicago.
The MDL noted Society is a regional insurer operating in six states — Illinois, Indiana, Iowa, Minnesota, Tennessee and Wisconsin — and that the lawsuits filed against it “share common factual allegations.”
The consolidated litigation was transferred to Judge Edmond E. Chang of the U.S. District Court in Chicago.
Society said in a statement, “Society does not comment on ongoing litigation. We look forward to a favorable resolution of this situation in the near future.”
In separate decisions, however, the MDL ruled against consolidating litigation filed against Cincinnati Insurance Co., Hartford Financial Services Group Inc., Certain Underwriters at Lloyd’s, and Travelers Cos., citing efficiency.
In its ruling in In Re: Cincinnati Insurance Company COVID-19 Business Interruption Protection Insurance Litigation, for instance, the MDL said the insurer has lawsuits filed against it in 29 different federal districts in 19 states, and it would take a “not insignificant amount of time to organize” to resolve the litigation.
Hartford said in a statement, “We are pleased that the panel opted not to consolidate The Hartford’s Covid-19, business interruption cases. We remain confident in our contract language and will continue to defend our position vigorously.
“Tragically, many small businesses have been dramatically impacted by the pandemic and the government-ordered shutdowns. Unfortunately, viruses are generally outside the scope of business interruption coverage. These policies do not cover this exposure and, accordingly, premiums were never collected for it.”
Travelers said in a statement, “We’re pleased with the decision of the Panel and look forward to resolving these cases.”
Cincinnati said in a statement, “We agree with the panel’s decision against the centralization of these cases in a company-specific MDL. We look forward to working with the courts where these cases originated. “
A Lloyd’s attorney had no comment.
More insurance and risk management news on the coronavirus crisis here.