On August 28, Judge Stephen V. Wilson of the Central District of California, entered the latest ruling in the ongoing saga of the COVID-19 business interruption coverage dispute between celebrity plaintiff’s attorney Mark Geragos and Insurer Travelers.
Continue Reading Despite Misapplying California Law, Federal Court Acknowledges Virus May Cause Physical Alteration to Property
Policy Interpretation Principles
Ninth Circuit Narrowly Construes IP Exclusion, Reaffirming Rules of Insurance Policy Construction
By Scott P. DeVries on
Posted in Duty to Defend, General Liability
The My Choice Decision
On August 19, 2020, the Ninth Circuit issued its decision in My Choice Software, LLC v. Travelers Casualty Insurance Co. of America, No. 19-56030, 2020 WL 4814235, holding that longstanding rules of insurance policy construction required reversal of a district court holding denying a duty to defend. Specifically, the Court determined that the Intellectual Property Exclusion in a Travelers policy did not unambiguously preclude the possibility of coverage for a claim against the Insured, My Choice, and that Travelers accordingly had a duty to defend.…
Dust Obscures Eleventh Circuit’s Ruling on “Direct Physical Loss”
By Walter J. Andrews & Michael S. Levine on
Posted in Business Interruption, COVID-19
On August 18, 2020, the United States Court of Appeals for the Eleventh Circuit affirmed a District Court’s 2018 ruling that Sparta Insurance Company need not cover a south Florida restaurant’s lost income and extra expenses resulting from nearby road construction. But, in doing so, the appeals court appears to deviate from even its own understanding of “direct physical loss” under controlling Florida law.
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Continue Reading Dust Obscures Eleventh Circuit’s Ruling on “Direct Physical Loss”
Court Concludes That COVID-19 Losses Can Qualify as “Direct Physical Loss”
By Lorelie S. Masters & Jorge R. Aviles on
Posted in Business Interruption, COVID-19
In a victory for policyholders, a federal district court found that COVID-19 can cause physical loss under business-interruption policies. In Studio 417, Inc., et al. v. The Cincinnati Insurance Co., No. 20-cv-03127-SRB (W.D. Mo. Aug. 12, 2020), the court rejected the argument often advanced by insurers that “all-risks” property insurance policies require a physical, structural alteration to trigger coverage. This decision shows that, with correct application of policy-interpretation principles and strategic use of pleading and evidence, policyholders can defeat the insurance industry’s “party line” arguments that business-interruption insurance somehow cannot apply to pay for the unprecedented losses businesses are experiencing from COVID-19, public-safety orders, loss of use of business assets, and other governmental edicts.
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Continue Reading Court Concludes That COVID-19 Losses Can Qualify as “Direct Physical Loss”