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. See Social Life Magazine, Inc. v. Sentinel Ins. Co., 1:20-cv-03311-VEC (Dkt. 24-1, S.D.N.Y. May 14, 2020). 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.”
Duane Morris’ Thomas Newman has been named by Best Lawyers as the 2019 “Lawyer of the Year” in New York City for Appellate Practice. The recognition is given to only one attorney for each practice area and city. Lawyers are selected based on high marks received during peer-review assessments conducted by Best Lawyers each year. Mr. Newman also received this distinction in 2018 and 2013.
Mr. Newman practices in the areas of insurance and reinsurance law, including coverage, claims handling, contract drafting and arbitration and litigation. In addition to his insurance/reinsurance practice, Mr. Newman has wide experience in appellate practice and has handled hundreds of appeals in both state and federal courts in New York and elsewhere and has argued 80 appeals in the New York Court of Appeals.
He is a member of the American Academy of Appellate Lawyers; a life member of the American Law Institute; a Fellow of the Chartered Institute of Arbitrators; a member of the London Court of International Arbitration; a member of the American College of Coverage and Extracontractual Counsel; a member of ARIAS-U.S.; a member of the Federation of Defense and Corporate Counsel; a Fellow of the New York State Bar Association Foundation; and a member of the New York State Office of Court Administration’s Advisory Committee on Civil Practice.
He is the original author of New York Appellate Practice, co-author of the Handbook on Insurance Coverage Disputes and the author of numerous articles on insurance/reinsurance and appellate practice.
The New York Court of Appeal on Tuesday, May 3, held that the Consolidated Edison pro rata allocation rule does not apply where the policies have prior insurance and non-cumulation clauses. The Court held that the pro rata rule in Consolidated Edison depends on policy language and that the prior insurance and non-cumulation clause is inconsistent with a pro rata approach. However, the Court did say that prior insurance and non-cumulation clauses would be enforced as anti-stacking clauses. Such enforcement could limit the amount of coverage available to a policyholder. The Court of Appeal also held that under the circumstances of the case, horizontal exhaustion would not apply.
To view this decision, please visit the New York Courts website.