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Lawsuits over denial of coverage for business interruptions due to COVID-19 are piling up in New Jersey courts, but some experts expect the plaintiffs will have a difficult time recovering.

The District of New Jersey saw 20 COVID-19 business interruption suits filed or removed from state court in July alone. A similar pattern is taking place across the nation, and a proposal before the Judicial Panel on Multidistrict Litigation to consolidate those suits could create the largest MDL ever.

Insurance carriers typically say that claims for closures related to COVID-19 are not eligible for business interruption coverage because of a lack of damages to the premises. The plight of businesses whose claims for coverage were turned down has been a high-profile issue, with lawmakers in New Jersey and elsewhere weighing various measures that would mandate coverage under some circumstances.

A bill that would require insurance companies to cover business interruption claims related to the COVID-19 emergency declaration was introduced earlier this year in New Jersey’s Legislature, where it stalled. The Assembly gave the bill a second reading on March 16 but it never reached a floor vote because of discussions over amending it. The measure never made it to the Senate floor as part of a group of bills that made up a COVID-19 emergency package.

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