Mealey's Catastrophic Loss : Mealey's : Legal News & Analysis

Mealey's Catastrophic Loss

April 18, 2023
Bound By Connecticut High Court Ruling, Panel Says No Coverage For COVID-19 Losses

NEW YORK — The Second Circuit U.S. Court of Appeals on April 17 affirmed a lower federal court’s finding that insureds failed to plausibly assert “direct physical loss or damage” to their insured property to trigger business interruption and extra expense coverage under their policy, noting that it is bound by the Connecticut Supreme Court’s recent holding in Connecticut Dermatology Group, PC v. Twin City Fire Insurance Company as to the meaning of the phrase “direct physical loss.”
April 17, 2023
9th Circuit Affirms Dismissal Of Restaurant’s Coronavirus Coverage Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s grant of an insurer’s motion to dismiss a restaurant and banquet hall insured’s lawsuit seeking coverage for its losses arising from the coronavirus pandemic, finding that the virus exclusion bars coverage.
April 17, 2023
Insured Fails To Assert Efficient Cause Of Its Losses Is Anything But Coronavirus

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on April 14 affirmed a lower federal court’s dismissal of a commercial real estate investment company’s breach of contract and bad faith lawsuit seeking coverage for its economic losses arising from the coronavirus pandemic, finding that the policy’s virus exclusion bars all coverage because the insured fails to plausibly assert that the efficient cause of its losses is anything but the coronavirus.
April 14, 2023
Policies Cover Named Windstorms, 11th Circuit Says, Reverses Ruling For Insurer

ATLANTA — The 11th Circuit U.S. Court of Appeals on April 13 held that a Florida church insured’s 2016 and 2017 insurance policies cover named windstorms, reversing a federal court’s summary judgment ruling in favor of the insurer in a coverage dispute arising from hurricanes Matthew and Irma.
April 14, 2023
Florida Panel Reverses JNOV In Favor Of Insured In Hurricane Irma Coverage Suit

WEST PALM BEACH, Fla. — A Florida appeals panel held that the evidence taken in the light most favorable to an insurer supported a jury verdict in its favor and a lower erred in granting a judgment notwithstanding the verdict (JNOV) to the insured in its breach of contract lawsuit over Hurricane Irma damage, reversing the lower court and directing it to reinstate the jury verdict.
April 13, 2023
Judge: Insured Businesses ‘Fatally Undermined’ Their COVID-19 Interruption Suit

LOS ANGELES — A California federal judge dismissed without leave to amend two businesses’ lawsuits accusing their insurer of violating California’s unfair competition law (UCL) by denying them coverage for damages caused by the suspension of their operations during government-ordered shutdowns, finding that they “fatally undermined” their argument opposing application of a virus exclusion in the policies by acknowledging that the shutdowns were caused by COVID-19.
April 12, 2023
5th Circuit Affirms No Coverage Owed For Dental Insureds’ COVID-19 Losses

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 11 affirmed a lower federal court’s ruling in favor of an insurer in a coverage dispute arising from the coronavirus, finding that Cajun Conti, LLC v. Certain Underwriters at Lloyd's, London forecloses the insureds’ arguments on appeal.
April 12, 2023
No Coverage Owed For Hurricane Irma Damage To Growing Crops, 11th Circuit Affirms

ATLANTA — The 11th Circuit U.S. Court of Appeals affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its lawsuit disputing coverage for Hurricane Irma damage to a farm owner insured’s growing crops, finding that the plain language of the policy makes clear that it does not insure growing crops.
April 12, 2023
Insured’s Expert Testimony Is Curtailed In Homeowner’s Coverage Dispute

HOUSTON — A Texas federal judge has partially granted and partially denied a motion to exclude an insured’s expert in an insurance coverage dispute for damage caused by a storm after finding that certain of the expert’s opinions aren’t admissible under Federal Rule of Evidence 702.
April 12, 2023
Homeowners Sue Insolvent Insurer, Guaranty Association Over Hurricane Ida Damage

NEW ORLEANS — Louisiana homeowners sued an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, asserting claims for breach of contract and breach of the duty of good faith and fair dealing related to the insurer’s alleged failure to compensate them for their damage from Hurricane Ida.
April 11, 2023
9th Circuit Certifies Coronavirus Coverage Question To Oregon Supreme Court

SEATTLE — The Ninth Circuit U.S. Court of Appeals on April 10 certified a question to the Oregon Supreme Court asking whether “the actual or potential presence of the COVID-19 virus on an insured's premises constitute ‘direct physical loss or damage to property’ for purposes of coverage under a commercial property insurance policy.”
April 11, 2023
Exclusions Bar Coverage For Restaurant’s COVID-19 Losses, California Panel Affirms

SANTA ANA, Calif. — A California appeals panel on April 10 held that although a restaurant operator insured has demonstrated that there is potential for coverage for its business income losses resulting from the governmental orders in response to the coronavirus pandemic, the insurer has established that the policy’s “ordinance or law” and virus exclusions precluded coverage as a matter of law.
April 10, 2023
Insured: Insurer Is Distracting N.Y. High Court From Controlling Policy Language

ALBANY, N.Y. — The owner and operator of numerous restaurants replied to a commercial property insurer’s response to its appeal of the First Department New York Supreme Court Appellate Division’s affirmation of a lower court’s dismissal of its coverage lawsuit arising from an alleged tens of millions of dollars in revenue loss prompted by the coronavirus pandemic, asking the New York Court of Appeals to reject the insurer’s attempt to distract it from the policy’s controlling language.
April 10, 2023
7th Circuit Refuses To Rehear No Coverage Ruling In $5.3M COVID-19 Suit

CHICAGO — The Seventh Circuit U.S. Court of Appeals denied an insured’s petition to rehear its March 2 ruling that affirmed a lower federal court’s dismissal of its declaratory judgment lawsuit seeking commercial insurance coverage for its more than $5.3 million in claimed derivative losses arising from the coronavirus pandemic.
April 07, 2023
California Insurance Commissioner Approves Stipulation In Premium Overcharge Dispute

LOS ANGELES — California Insurance Commissioner Ricardo Lara approved the terms of a stipulation between the California Department of Insurance (CDI) and Kemper Independence Insurance Co. settling the CDI’s allegation that the insurer violated California Insurance Code and California Code of Regulations when it failed to seek the commissioner’s prior approval of a change to its wildfire surcharge.
April 07, 2023
Federal Judge Dismisses Hurricane Harvey Coverage Dispute After Parties Settle

HOUSTON — A federal judge in Texas dismissed without prejudice a Hurricane Harvey coverage dispute after the insureds and their insurance broker and agent reached a settlement.
April 06, 2023
6th Circuit Dismisses Church’s Appeal Over Water Damage No-Coverage Ruling

CINCINNATI — The Sixth Circuit U.S. Court of Appeals granted a stipulated motion to dismiss with prejudice filed by parties in an appeal of a federal district court’s finding that an insurer did not breach its contract with a church by failing to provide coverage for water damage stemming from a leaky roof based on the policy’s negligent work exclusion, which bars coverage for the claim.
April 06, 2023
Hurricane Damage Suit Against Insolvent Insurer Remanded For Lack Of Diversity

NEW ORLEANS — A Louisiana federal judge granted insureds’ motion for leave to file an amended complaint and ordered the case to be remanded to state court in their breach of contract suit alleging that a now-insolvent insurer failed to provide adequate payment for alleged property damage related to Hurricane Ida, finding that adding the Louisiana Insurance Guaranty Association (LIGA) as the successor-in-interest to the insurer defeats “diversity of citizenship between the parties.”
April 05, 2023
California High Court Accepts Certified Question In Coronavirus Coverage Suit

SAN FRANCISCO — The California Supreme Court accepted a certified question from the Ninth Circuit U.S. Court of Appeals asking whether an insurance policy’s virus exclusion is unenforceable in a coverage lawsuit brought by owners, operators and managers of two Napa Valley, Calif., restaurants in the wake of the coronavirus pandemic.
April 04, 2023
5th Circuit Affirms Dismissal Of Orthopedic Firm’s Coronavirus Coverage Dispute

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on April 3 affirmed lower federal court’s dismissal of an orthopedic firm insured’s amended complaint for declaratory relief, bad faith, fraud and negligent misrepresentation over the denial of its business interruption claim related to COVID-19 shutdown orders, finding that the insured fails to satisfy the requirement of pleading an “accidental direct physical loss” to trigger coverage under the insurance policy.
March 30, 2023
Panel: Fact Issues Exist As To Whether Insurer Was Prejudiced By Untimely Notice

WEST PALM BEACH, Fla. — A Florida appeals panel on March 29 held that there is an issue of material fact regarding whether a homeowners insurer was prejudiced by the insureds’ lack of timely notice of their property damage caused by Hurricane Irma, reversing a lower court in part.
March 30, 2023
D.C. Panel: Restaurants Did Not Incur Direct Physical Loss From COVID-19 Shutdown

WASHINGTON, D.C. — The District of Columbia Court of Appeals affirmed a lower court’s denial of insureds’ expedited motion for summary judgment and grant of their all-risk insurer’s cross-motion for summary judgment in a coronavirus coverage dispute, finding that the insureds’ “loss of use” of their properties as a result of D.C. Mayor Muriel Bowser's shutdown orders was not a “direct physical loss” that triggered insurance coverage.
March 30, 2023
Federal Judge Dismisses Thunderstorm Coverage Suit After Parties Reach Settlement

JASPER, Ala. — A federal judge in Alabama dismissed with prejudice an insured’s lawsuit seeking coverage for property damage allegedly caused by a 2019 thunderstorm after the parties indicated that they reached a settlement.
March 28, 2023
Panel Affirms Judgment Against Insurer In Bad Faith Suit Over Hailstorm Damage

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on March 27 affirmed a lower federal court’s judgment against an insurer in an insured’s breach of contract and bad faith lawsuit arising from hailstorm damage, rejecting the insurer’s argument that a $285,000 jury award for its breach of contract is excessive.
March 27, 2023
Burger Chain Asks 9th Circuit To Rehear No Coverage Ruling For Coronavirus Losses

PASADENA, Calif. — In-N-Out Burgers filed a petition for panel rehearing and rehearing en banc challenging the Ninth Circuit U.S. Court of Appeals’ March 10 ruling that affirmed a lower court’s dismissal of its breach of contract lawsuit against its commercial property insurer, arguing that the Ninth Circuit should correct or withdraw its ruling and stay the appeal pending the California Supreme Court’s answer to the Ninth Circuit’s certified question in Another Planet Entertainment, LLC v. Vigilant Ins. Co. to determine whether “the actual or potential presence of the COVID-19 virus on an insured's premises” constitutes “direct physical loss or damage to property” to trigger coverage under an insured’s commercial property insurance policy.