 On February 18th, 2020, at the Fox Theatre in downtown Tucson, Arizona, country star Lyle Lovett played to a sold-out crowd. It was a typically lucrative night for the 90-year-old Art Deco Theatre. An event like the Lyle Lovett event might have been grossing $80,000 to $90,000, potentially more. Then came COVID-19. After we shut down on March 13th, our earned revenue went to zero. We have not earned $1 since March 13th. As businesses across the country shuttered due to the pandemic, many turned to what they thought was their last line of defense, their business interruption insurance. Their claims were denied. Now, hundreds of businesses from theaters to restaurants to minor league baseball teams are suing their insurers. Both sides say their very survival is at stake. Is the background okay? Let us elevate it a little bit. This is Daniel Schwartz, a law professor at the University of Minnesota. He has been closely monitoring the fight over business interruption insurance and coronavirus. Most business interruption policies start out by saying that in order for there to be coverage, there needs to be physical damage or loss to insured property that results in the interruption of your business. While each contract is different, covered damages typically range from natural disasters like floods and earthquakes to man-made ones like first-water pipes and fires. Standard insurance covers rebuilding the physical structure, while interruption insurance covers revenue lost while the property is out of commission. Some business interruption contracts also cover when a government official closes a property due to damage from its neighbor, what's known in the industry as a civil authority action. But again, it all comes back to that word, damage. So the key question courts will have to decide in the coming months is, does COVID-19, a microscopic virus cause physical damage to a business? Owners say yes. Courts have long recognized that that term physical loss or damage doesn't just refer to physical changes that are observable by the naked eye. For example, courts have ruled that asbestos, largely invisible to the eye, can cause physical damage and property. But before businesses get their hopes up, there's one major roadblock that they are going to have impressing their cases, a virus exclusion written directly into their contracts. For all the talk about how no one could have predicted the pandemic, nobody knew there'd be a pandemic. It's an unforeseen problem, give out of nowhere. There was one group who saw it coming, insurance companies. In 2003, the SARS virus infected more than 8,000 people, mostly in Asia, and killed more than 800. While the outbreak was largely contained, the insurance industry still paid out millions in business interruption claims. Crunching the numbers, industry executives realized that a larger, global outbreak could quickly cripple their business. Insurers started to write into their contracts, exclusions for losses caused by viruses or bacteria. These exclusions are likely going to be difficult to challenge in court. Most judges are not going to rewrite contract law. This is Evan Weinberger. He covers the insurance industry for Bloomberg Law. Every case that I've seen has basically ended up with either the judge saying, I'd really like to help, but I can't. It's in the policy. Or the plaintiff saying, this is a losing fight. I'm just going to drop it before we get an adverse ruling that affects other people. That's the decision Tucson's Fox Theater ultimately made. Ultimately, it became very clear that that business interruption was the hard line in the sand that the insurance industry was drawing. The insurance industry says that requiring it to pay up could quickly exhaust the $800 billion it has to settle claims. Business owners say that they have spent years paying premiums exactly for times like this. But concrete solutions have been hard to come by. In the early days of the pandemic, a handful of states proposed bills that would require insurers to retroactively pay coronavirus claims. Those efforts largely fizzled. The insurance companies have basically said, to pass bills like that, we will not provide coverage in your state. It looks like the insurance industry beat it back. There's growing consensus that an entity with even deeper pockets than the insurance industry is going to have to step in. What people think is going to have to happen is some sort of program similar to the national flood insurance program. Things that the companies don't necessarily want to cover because of the expense of it all. Federal government would then step in as sort of a backstop. One thing is certain, business interruption litigation will be around for years to come. It may even outlast the virus itself. The cases will still be going just because that's what we do in the United States. We sue when these cases last forever.