Cincinnati Financial faced 190 lawsuits from business owners claiming the insurance company wrongfully denied COVID-19 pandemic business interruption claims, including 42 cases in Ohio alone. The lawsuits targeted Cincinnati Financial’s systematic denial of coverage to restaurants, retail shops, and other closed businesses seeking compensation for lost revenue during pandemic shutdowns. Courts split on whether COVID-19 constituted “direct physical loss” under insurance policies—with the Ohio Supreme Court siding with Cincinnati Financial in December 2022, while the North Carolina Supreme Court ruled against the company in December 2024. This article explains what happened with Cincinnati Financial’s business interruption claims, the lawsuits filed against the company, key court rulings, and what they mean for affected business owners.
Table of Contents
- How Many Lawsuits Did Cincinnati Financial Face Over COVID Business Interruption Claims?
- The “Direct Physical Loss” Legal Standard That Courts Used to Determine Coverage
- Ohio Supreme Court Ruled Against Business Owners, North Carolina Supreme Court Ruled For Them
- What Happened to the Class Action Lawsuit by Primavista Restaurant and Other Shut-Down Businesses
- How Much Did Cincinnati Financial Spend Defending Against These Claims?
- Who Was Eligible and What Compensation Claims Were Available
- Current Status and What Options Remain for Affected Businesses
How Many Lawsuits Did Cincinnati Financial Face Over COVID Business Interruption Claims?
Cincinnati Financial ranks third among all insurers nationally in pandemic-related business interruption litigation, with 190 total lawsuits filed—more than almost any other insurance carrier. Of those 190 cases, 42 were filed in Ohio, where the company is based.
The sheer volume of litigation reflects the scale of denials: across the entire insurance industry, there have been 2,360 total business interruption cases filed since March 2020, and Cincinnati Financial accounts for more than 8% of that national caseload. The company’s defense costs were substantial—Cincinnati Financial spent more than $19 million defending against these business interruption claims, a figure that underscores both the aggressive legal defense strategy and the number of cases that proceeded to trial or settlement negotiations rather than being quickly dismissed.
The “Direct Physical Loss” Legal Standard That Courts Used to Determine Coverage
The central legal dispute across all Cincinnati Financial lawsuits turned on a single phrase in insurance policies: “direct physical loss.” Business owners argued that COVID-19 forced them to physically close their doors, lose their clientele, and suffer direct economic harm. Cincinnati Financial’s position was different—the company argued that COVID-19 is a virus that does not physically damage or alter property. The virus does not change a building’s appearance, shape, color, or structural integrity.
Without a direct physical change to the insured property itself, Cincinnati Financial claimed there was no “direct physical loss” triggering business interruption coverage. Courts interpreted this language differently depending on the jurisdiction. Some courts, like Ohio’s, agreed with Cincinnati Financial that the virus alone—without physical damage to the building—did not constitute direct physical loss. However, this interpretation became controversial, and not all courts accepted it.
Ohio Supreme Court Ruled Against Business Owners, North Carolina Supreme Court Ruled For Them
The Ohio supreme Court’s December 2022 ruling sided with Cincinnati Financial, deciding that COVID-19 does not constitute “direct physical loss” under Ohio insurance policies. This was a significant victory for the company and dealt a blow to Ohio business owners seeking pandemic-related coverage. However, just two years later, the North Carolina Supreme Court reached the opposite conclusion in *North State Deli v.
Cincinnati Insurance Co.* The North Carolina court ruled that Cincinnati Financial owed coverage to restaurants for pandemic business interruption losses where the policies lacked specific virus exclusions. The court found that if a policy did not explicitly exclude viruses from coverage, then COVID-19 losses should be compensable. This split decision highlighted the inconsistency in how different state courts approached the same legal question—and left Cincinnati Financial facing liability in some jurisdictions while protected in others, including its home state of Ohio.
What Happened to the Class Action Lawsuit by Primavista Restaurant and Other Shut-Down Businesses
One of the first and most notable COVID-related business interruption lawsuits against Cincinnati Financial was filed on May 1, 2020—just weeks after pandemic shutdowns began. The Wolterman Law Office filed a class action on behalf of Primavista restaurant and other shut-down businesses in Ohio claiming Cincinnati Financial wrongfully denied their pandemic-related business interruption claims. This early lawsuit became a template for hundreds of similar cases filed across the country by other law firms representing restaurants, retail stores, gyms, and service businesses.
The Primavista class action and similar cases proceeded through Ohio courts alongside Cincinnati Financial’s aggressive litigation strategy. However, the Ohio Supreme Court’s December 2022 ruling effectively resolved many Ohio cases in Cincinnati Financial’s favor by establishing that COVID-19 does not constitute direct physical loss under Ohio law. For businesses in other states, outcomes varied depending on whether local courts adopted Ohio’s interpretation or North Carolina’s approach.
How Much Did Cincinnati Financial Spend Defending Against These Claims?
The $19 million in defense costs Cincinnati Financial reported reveals the scale and intensity of the litigation strategy. This figure includes legal fees, expert witness testimony, court costs, and settlement negotiations across 190 lawsuits. For context, this amount represents a significant corporate expense, though it pales in comparison to the potential liability if Cincinnati Financial had lost across all jurisdictions.
The high defense spending also reflects that Cincinnati Financial pursued an aggressive litigation strategy rather than settling early or broadly. Many business owners and their attorneys had to invest their own resources fighting these cases—legal fees that smaller businesses often could not afford. This created a power imbalance where well-funded Cincinnati Financial could outlast smaller plaintiffs’ firms and individual business owners in prolonged litigation.
Who Was Eligible and What Compensation Claims Were Available
The Cincinnati Financial business interruption claims involved hundreds of small and medium-sized businesses across multiple industries. Restaurants were among the most affected, as they faced complete closures during government-mandated lockdowns and struggled with capacity restrictions even after reopening. Other affected businesses included retail stores, salons, fitness centers, entertainment venues, and professional service providers—essentially any business forced to close or significantly restrict operations during COVID-19 lockdowns.
Eligibility for compensation claims depended on whether the business held a Cincinnati Financial policy that included business interruption coverage and whether that policy could be interpreted to cover pandemic losses. However, after the Ohio Supreme Court’s ruling, Ohio-based businesses found themselves ineligible in their home state because courts determined the virus did not constitute direct physical loss. Businesses in states following North Carolina’s interpretation had better prospects, though even there, policy language and exclusions mattered. For many affected business owners, pursuing claims meant hiring attorneys and engaging in costly litigation with uncertain outcomes.
Current Status and What Options Remain for Affected Businesses
As of 2026, the Cincinnati Financial litigation landscape remains mixed. Ohio businesses have largely exhausted their legal options after the state supreme court’s decision, though appeals to federal court or arguments based on different policy language remain theoretically possible for some cases. Businesses in other states continue to pursue claims, with outcomes dependent on local court interpretations.
The North Carolina ruling provides a pathway for recovery in jurisdictions that adopt that court’s reasoning about policies without virus exclusions. Some businesses have settled with Cincinnati Financial for partial or full compensation, though the company’s willingness to settle appears limited to cases where state courts have ruled against it or where litigation appears likely to result in unfavorable precedent. Business owners who believe they have valid claims should consult with attorneys experienced in insurance coverage litigation, particularly those familiar with their state’s approach to the “direct physical loss” question. The broader lesson from the Cincinnati Financial litigation is that policy language—specifically whether a policy explicitly excludes viruses—can determine whether pandemic-related losses are covered.