On Tuesday, a New Hampshire trial court awarded summary judgment to the owner of scores of hotels after finding that the hotels sustained covered “physical loss of or damage to” insured property caused by the pandemic presence of COVID-19 and its viral agent, SARS-CoV-2. The merits ruling is yet another recent victory for policyholders who continue to make headway against an early wave of insurance company dismissals, most of which, unlike the ruling on Tuesday, never considered evidence in support of their decisions.
Continue Reading New Hampshire Court Finds Hoteliers Sustained Covered COVID-19 BI Loss

The Northern District of New York recently awarded summary judgment to insurer Affiliated Factory Mutual Insurance Co. against Mohawk Gaming Enterprises, a casino and resort operated by the Saint Regis Mohawk Tribe located on the border of New York and Canada. Mohawk Gaming sued AFM seeking recovery of business income losses due to the COVID-19 pandemic. In granting the insurer’s motion, however, the court failed to consider all parts of the AFM policy, as required under New York law, and failed to afford meaning to specific language contained in the policy’s two communicable disease sections, each of which specifically contemplate that “communicable disease,” as defined and covered under the AFM policy, can cause loss and damage to property. Instead, the court followed other decisions from “numerous courts around the country,” each of which is based on inherently flawed reasoning (e.g., reliance on cases where no presence of virus was alleged or cases that clearly and broadly excluded loss caused by virus), to conclude that the presence of virus “is insufficient to trigger coverage when the policy’s language requires physical loss or physical damage.” In fact, a federal court in Texas recently rejected the very same reasoning employed in Mohawk Gaming after recognizing that the FM/AFM policy form “is much broader than [others] and expressly covers loss and damage caused by ‘communicable disease.’” See Cinemark Holdings, Inc. v. Factory Mut. Ins. Co., No. 4:21-cv-00011 (E.D. Tex. May 5, 2021).

Continue Reading New York Federal Court Ignores Policy’s Uniquely Broad Wording in Favor of Following the Herd

On Wednesday, a federal judge in Texas denied Factory Mutual’s Rule 12(c) motion for judgment on the pleadings, finding that the plaintiffs adequately alleged that the presence of COVID-19 on their property caused covered physical loss or damage in the case of Cinemark Holdings, Inc. v. Factory Mutual Insurance Co., No. 4:21-CV-00011 (E.D. Tex. May 5, 2021). This is the third COVID-19-related business interruption decision from Judge Amos Mazzant since March, but the first in favor of a policyholder. Taken together, the three decisions have two key takeaways and provide a roadmap for policyholders in all jurisdictions.

Continue Reading Allegations That COVID-19 Was Physically Present and Altered Property are Sufficient to Sustain COVID-19 Business Interruption Suit

On Wednesday, a federal judge in New York denied FM’s Rule 12(c) motion for judgment on the pleadings after finding the Contamination Exclusion in the Factory Mutual policy to be ambiguous as to whether it bars coverage for business interruption losses resulting from communicable disease.  The case is Thor Equities, LLC v. Factory Mutual Ins. Co., No. 20 Civ. 3380 (AT) (SDNY).  This is a critical decision under the Factory Mutual policy form, which is substantively the same as policies issued by Factory Mutual’s sister company, Affiliated FM Insurance Company.  Factory Mutual and Affiliated FM have maintained that the contamination coverages are “exceptions” to this exclusion, with the exclusion precluding coverage for communicable disease loss under other policy coverages.  But the ruling validates what policyholders have been arguing – that communicable disease “loss” is covered throughout the Factory Mutual policy, in addition to under the sublimited communicable disease emergency response coverages.

Continue Reading Factory Mutual’s “Contamination” Exclusion Is Ambiguous; May Not Limit Coverage For COVID-19 Business Interruption Loss

Hunton insurance attorneys Syed Ahmad, Geoffrey Fehling, and Kevin Small commented on a retailer’s insurance dispute related to COVID-19 in the latest edition of the Recall Roundup, posted on the Hunton Retail Law Resource Blog.

In a setback for retail-policyholders hoping to enforce coverage for losses due to COVID-19 in federal court, a Tennessee district court recently knocked out a complaint filed by a sprawling Nashville establishment seeking coverage under a food contamination provision in its property policy. The court’s opinion dismissing Nashville Underground LLC v. AMCO Insurance Co. is noteworthy due to the great lengths taken to define a policy provision—intended to provide broad coverage for disruption of business due to the suspicion of food contamination—in a way that limits coverage contrary to the reasonable expectations of businesses purchasing policies specifically tailored to protect against actual or suspected contamination.


Continue Reading Tennessee Federal Court Dismisses Recent Food Contamination-Related Insurance Coverage Dispute Tied to the Ongoing COVID-19 Pandemic

One year into the COVID-19 pandemic, courts have issued hundreds of rulings in COVID-19 business interruption lawsuits, many favoring insurers. Yet those pro-insurer rulings are not based on evidence, much less expert opinion evidence. For insurers, ignorance is bliss.

Continue Reading Hunton Insurance Recovery Partner Michael Levine Quoted on Why Courts Must Consider the Science of COVID-19

A California state court denied an insurer’s motion to dismiss Goodwill Industries of Orange County’s COVID-19 business-interruption claim after an apparent reassessment of how California’s federal courts have applied (or, rather, misapplied) California precedent to COVID-19 cases. The case is Goodwill Industries of Orange County, California v. Philadelphia Indemnity Insurance Co., No. 30-2020-01169032-CU-IC-CXC (Cal. Super. Ct. Jan. 28, 2021).

Continue Reading Good Result for Goodwill on Its Bid for COVID-19 Business-Interruption Claim

The Hunton Insurance Recovery Team recently issued a client alert analyzing how two Ohio federal judges ruled on COVID-19 coverage cases.

Continue Reading One Ohio Federal Court Serves COVID-19 Insurance Coverage Victory for Policyholders While Another Certifies Business Interruption Coverage Question to State Supreme Court

As previously reported, an Oklahoma state court recently granted summary judgment to the Cherokee Nation for its COVID-19 business interruption claim. The court has now issued a more substantive opinion, establishing the merits of the Cherokee Nation’s claim and providing yet another blueprint for policyholders seeking to recover COVID-19-related losses under “all risk” commercial property insurance policies.

Continue Reading Oklahoma Court Issues Reasoned Opinion, Adopts Policyholder View on “Physical Loss or Damage” as Only Reasonable One, in Cherokee Nation COVID-19 Coverage Win

A South Florida restaurant has asked the US Supreme Court to overturn a federal district court’s ruling that the restaurant is not entitled to coverage under an “all risk” commercial property insurance policy for lost income and extra expenses resulting from nearby road construction. In the underlying coverage action, the policyholder, Mama Jo’s (operating as Berries in the Grove), sought coverage under its all-risk policy for business income losses and expenses caused by construction dust and debris that migrated into the restaurant. Should the Supreme Court grant certiorari, the case will be closely watched by insurers and policyholders alike as an indicator of the scope of coverage available under all-risk policies and whether the principles pertinent to construction dust and debris (at issue in Mama Jo’s claim) have any application to the thousands of pending claims for COVID-19-related business interruption losses pending in the state and federal court systems.

Continue Reading Restaurant Wants SCOTUS to Dust Off Eleventh Circuit’s “Physical Loss” Ruling