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COVID-19 Business Interruption Claims: First California Court of Appeal Decision Holds That Closure Orders Are Not “Direct Physical Loss”

Posted on November 18, 2021 by Dina R. Richman

California has been a hotbed of litigation regarding COVID-19 business interruption claims. The vast majority of the trial courts have held in favor of insurers and against businesses. Now, the California Court of Appeal has weighed in. In a published decision, The Inns by the Sea v. California Mutual Insurance Company (November 15, 2021, Case No. D079036), the Fourth Appellate District held that a hotel’s business income loss resulting from the COVID-19 pandemic was not covered. About The Author

Tagged with: Business Interruption Coverage, California, Civil Authority Coverage, covid-19, Insurance, shutdown order
Posted in Uncategorized

Ninth Circuit Holds COVID-19 Business Interruption Losses Require Direct Physical Damage To The Property

Posted on November 09, 2021 by Michael W. Melendez, Alicia Gurries

In March 2020, Mudpie Inc.—a San Francisco children’s store—ceased operations when California Governor Gavin Newsom ordered all “non-essential” businesses to close due to the COVID-19 pandemic. Because of the shut-down, Mudpie sought coverage for loss of “business income” and “extra expense” under a commercial property policy issued by Travelers Casualty Insurance Company of America (“Travelers”). The Travelers policy provided coverage during the “period of restoration” for loss of business income due to the necessary suspension of the insured’s operations caused by “direct physical loss of or damage to the [insured’s] property.” About The Authors

Tagged with: Actual Damage, business interruption, COVID Coverage, Insurance, shutdown order
Posted in Uncategorized

For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.

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