The first California state appellate decision on COVID-19 Business Interruption coverage is now in the books, and it’s one more victory for insurers. In The Inns by the Sea v. California Mutual Ins. Co., Case No. D079036 (Cal. Ct. App. 4th Dist., Div. 1, Nov. 15, 2021), the California Court of Appeal for the Fourth District found there was no coverage, notwithstanding the absence of a virus exclusion in the relevant policy. The court’s 36-page opinion provides a thorough and careful analysis of several important COVID-19-related business interruption issues.
A video replay of the COVID-19: Navigating Forward Webinar Series session, “Lessons Learned from Recent Headlines and Court Rulings on Contract Cases Across Industries,” is available.
Duane Morris will be hosting the webinar, “Lessons Learned from Recent Headlines and Court Rulings on Contract Cases Across Industries,” on March 11, 2021, from 1:00 p.m. to 2:00 p.m. Eastern.
This is the fourth session of the Duane Morris COVID-19: Navigating Forward Webinar Series. For more information and the registration link, please visit the firm website.
The District of New Jersey granted a motion to dismiss a restaurant owner’s purported class action lawsuit seeking business interruption coverage by analyzing: (1) the New Jersey Governor’s Executive Order and (2) the policy language, in a commercial all-risk property damage policy, that excluded coverage for losses covered by viruses.
In what could be a sign of things to come across the country, a new workers’ compensation insurance law recently took effect in California that may make it easier for employees to obtain workers’ compensation insurance benefits if they become ill from COVID-19.
To read the full text of this Duane Morris Alert, please visit the firm website.
On July 31, the seven-member Judicial Panel on Multi-District Litigation (JPML) heard oral argument of extraordinary length on the potential consolidation of all federal cases involving business interruption coverage relating to COVID-19 and/or COVID-19 shutdown orders, totaling approximately 449 such federal cases, roughly 200 of which are putative class actions.
On April 9, 2020, Governor Baker issued an emergency order, mandating that insurers cover all medically necessary emergency department and inpatient services costs of COVID-19 treatment at both out-of-network and in-network hospitals and other medical facilities, without any cost to the patient, setting the OON reimbursement rate at 135% of Medicare, and prohibiting providers from balance billing. The Governor appears to have relied on § 7 of the Massachusetts emergency preparedness and response law in issuing the Order. Section 7 gives the Governor broad powers during a state of emergency, including “[r]egulation of the business of insurance and protection of the interests of the holders of insurance policies and contracts and of beneficiaries thereunder and of the interest of the public in connection therewith.”
On July 30, the Judicial Panel on Multi-District Litigation (the Panel) heard oral argument of extraordinary length on the potential consolidation of all the federal cases involving business interruption coverage relating to COVID-19 and/or the COVID-19 shut-down orders. There are some 449 such federal cases, approximately 200 of which are putative class actions.
Berkshire Hathaway and one of its units on Monday urged a Pennsylvania federal court to toss a restaurant’s suit seeking insurance coverage for losses caused by the COVID-19 pandemic, arguing that a virus exclusion “plainly applies” to the restaurant’s claims.
To read the full text of this article, please visit the Law360 website.
To date, approximately 150 business-interruption insurance coverage lawsuits have been filed in federal courts arising from COVID-19 and related government-ordered restrictions. In what appears to be the first substantive ruling on the merits in these cases, the Southern District of New York recently ruled against an insured who could not meet its burden to show a likelihood of success in establishing “property damage” due to the novel coronavirus to support its claim for injunctive relief. Judge Caproni expressed sympathy “for every small business that is having difficulties during this period of time,” but concluded that “New York law is clear” in requiring actual property damage to trigger business interruption coverage. Because the insured’s coverage theory rested on a government shutdown in the absence of any property damage, the Court denied its preliminary injunction motion, reasoning “this is just not what’s covered under these insurance policies.”