The North Carolina Business Court has refused to dismiss a bad-faith lawsuit filed by Tanger Property Ltd. Partnership, which is seeking insurance coverage for COVID-19-related business-interruption losses.
Tanger, owner of outlet shopping centers across the U.S., argued that government shutdown orders caused physical damage to property and direct losses under its all-risk policies.
The company also said it lost rental income and had to spend extra to stay partially operational during the pandemic.
Ace American Insurance and Liberty Mutual Fire Insurance Co. rejected those claims back in 2021, saying Tanger hadn’t shown any “direct physical loss” to its properties and that other provisions excluded virus-related damages.
The legal landscape shifted in 2024 when the North Carolina Supreme Court ruled that if an all-risk policy doesn’t explicitly exclude virus coverage, a reasonable policyholder could expect protection for pandemic-related closures.
The decision made North Carolina the only state in the U.S. to recognize this kind of COVID-related business-interruption coverage.
Relying on that ruling, Tanger filed a breach of contract suit in March 2025 and later demanded the insurers revisit their denials.
The carriers responded by asking the Business Court to dismiss the case, arguing that Georgia – where the policies were delivered to Tanger’s broker – was the correct venue. They also pointed out that only two of Tanger’s 39 outlets sit inside North Carolina.
The Business Court disagreed. It cited state precedent requiring North Carolina law to govern insurance disputes involving property or interests in the state.
The court also referenced a Supreme Court decision holding that if a company maintains a close connection to North Carolina, state law applies. Tanger’s Greensboro headquarters and ongoing operations sealed that connection.
With that, the insurers’ motion to dismiss was denied. North Carolina remains the stage for one of the few pandemic-related coverage fights still standing.
