Insurers’ COVID-19 Notebook: What You Need to Know Now – Week of November 7, 2022 – Insurance Claims
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Courts Dismiss COVID-19 Business Interruption Claims
On October 31, 2022, the District Court for the District of New Jersey granted American Guarantee and Liability Insurance Company‘s motion to dismiss a healthcare provider network’s COVID-19 business interruption request. . The court found that the plaintiff did not make a claim for business interruption due to communicable disease coverage because the COVID-19 executive order “restricted certain activities on the insured location but did not prohibit not access to the insured location as is necessary to trigger coverage under the [business interruption by communicable
disease coverage].” Order at 10. The case is Inspira Health Network c. Am. Gar. & Lib. Ins. Co.
On October 31, 2022, the District Court for the Central District of California granted the Federal Insurance Company‘s motion to dismiss a deli owner and operator’s COVID-19 business interruption claims. The court found that the “binding appeal authority” ruled that the losses related to the COVID-19 pandemic did not constitute physical loss or damage. Order at 5-7. The case is Roy Kavin, Inc. v. Fed. Ins. Co.
On October 27, 2022, the District Court for the Eastern District of California granted the Illinois Union Insurance Company’s motion to dismiss an eye care company’s COVID-19 business interruption claims. The court concluded that the plaintiff’s proposed reading of its coverage of “polluting conditions” would lead to “absurd results”. Order at 6. The court therefore found that the plaintiff had failed to demonstrate that his claim was covered and dismissed all causes of action. Identifier. at 7. The case is VisionServ. Map c. Ill. Union Ins. Co.
New lawsuits for business interruption by insurers:
Several insurers sued a resort management company in New Jersey (Cape May County) state court seeking declaratory relief in a COVID-19 business interruption dispute. The policy purportedly contains business income, additional expenses and entry or exit coverage and excludes loss or damage caused by “indirect or consequential losses of any kind” or by pollution or contaminants. Complaint ¶ 28. Insurers seek declaratory relief that policyholder is not entitled to coverage because coronavirus and corresponding stay-at-home orders did not cause “direct physical loss or damage” . Identifier. ¶ 53. The case is Swiss Re Corp. Solutions Capacity Insurance Co. v. Cape Resorts Management Co.
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