Southern District of New York recently held that a contamination exclusion was
ambiguous in the context of Covid-19-related business interruption losses.
Accordingly, the court held that the issue was inappropriate to decide at the
summary judgment stage and denied both parties’ cross-motions for summary
Thor Equities LLC v. Factory Mut. Ins. Co., No. 1:20-cv-03380 (S.D.N.Y.
Mar. 31, 2021), an insured commercial property owner sought business
interruption coverage under its property insurance policy. The parties filed
cross-motions for summary judgment, asking the court to determine the
applicability of two exclusions, one of which was a contamination exclusion.
The exclusion excluded “contamination, and any cost due to contamination
including the inability to use or occupy property or any cost of making
property safe or suitable for use or occupancy.” The policy defined “contamination”
as “any condition of property due to the actual or suspected presence of any
foreign substance, impurity, pollutant, hazardous material, poison, toxin,
pathogen or pathogenic organism, bacteria, virus, disease causing or
illness causing agent, fungus, mold or mildew.” The parties agreed that the
inclusion of “virus” in the definition of “contamination” applied to Covid-19.
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