New York Court of Appeals Roundup: Policies Covering Direct Physical Loss Do Not Apply to COVID Business Interruption Losses
03.20.24
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In their column in the New York Law Journal, Litigation Partners Bill Russell and Linton Mann III discuss Consolidated Restaurant Operations v. Westport Insurance. In its decision, the Court of Appeals clarified that insurance policies providing coverage for “direct physical loss or damage” to an insured’s premises do not apply to business interruption losses sustained as a result of COVID-19 absent some actual, material alteration to those premises or a complete and persistent dispossession from the premises. While this was an issue of first impression under New York law for the Court of Appeals, the decision notes that the plaintiff did not identify, and the Court has not discovered, any other state or federal decision finding coverage for COVID-19–related business interruption losses under policy language similar to the standard policy language at issue in this case.
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