Mar.15.2021
Courts Dismiss COVID-19 Business Interruption Claims
On March 8, 2021, the district court for the Southern District of California granted Travelers Property Casualty Company of America’s motion to dismiss a flower importer and distributor’s COVID-19 extra expense claim. The court found that the policy’s Acts or Decisions Exclusion which “bars coverage for property damage, loss, and expense that is caused by or results from any decision, act or failure to act or decide, by…any ‘governmental body,’” unambiguously excluded coverage.
See Order at 13. Because Travelers based its denial of coverage on the applicable exclusion, the court similarly dismissed the plaintiff’s breach of implied covenant of good faith and fair dealing claim.
Year in Review: Top Insurance Cases of 2020 Thursday, January 28, 2021
Not surprisingly, COVID-19 business interruption insurance disputes dominated media headlines for most of 2020. Nonetheless, there were a number of other insurance rulings that will undoubtedly shape the coverage landscape. Policyholders enjoyed a number of significant wins including significant victories related to COVID-19 business interruption cases. The start of a new year gives us an opportunity to highlight some of 2020’s most notable coverage decisions.
COVID-19 Business Interruption
Insurance companies’ widespread blanket denials of policyholders’ claims for business interruption due to COVID-19 for companies ranging in size from small mom-and-pop shops to large retailers prompted a flood of litigation in both state and federal courts. Although 2021 shows promise for gaining control over the disease, the resulting insurance disputes are certain to remain center stage. While insurers ma
Friday, December 18, 2020
On December 9, 2020, in
Light Stream Spa v. State Farm Mutual Automobile Ins. Co., No 2:20-cv-00265-RAJ-LRL (E.D.V.A. Dec. 9, 2020), a Virginia federal court refused to dismiss a majority of the policyholder’s breach of contract claim and its request for bad faith damages, declaratory judgment and class certification, all stemming from the insurers’ denial of coverage for COVID-19 related business income losses. The policyholder, a spa, purchased an all-risk property insurance policy with coverage for, among other things, loss of business income and extra expense. The spa, a non-essential business, closed on March 16, 2020 as a result of state orders requiring all non-essential businesses to close due to the COVID-19 pandemic. It did not reopen until May 15. Once re-opened, however, the policyholder was required to implement operational controls and precautions to ensure the safety of the public and its employees. Following its closure, the