Westport Insurance coverage victorious in NY enterprise interruption case

The New York State Court docket of Appeals, NY’s highest courtroom, has affirmed the Appellate Division’s order within the COVID-19 enterprise interruption case between Consolidated Restaurant Operations (CRO) and Westport Insurance coverage Company – the latter in the end rising victorious within the disputed declare.

Previous to the case reaching the Appeals Court docket, the Supreme Court docket and the Appellate Division had dominated in favor of the insurer, declaring that CRO’s “all-risk” industrial property insurance coverage coverage didn’t cowl the alleged losses. Westport had argued that CRO couldn’t set up that the coronavirus precipitated direct bodily loss or harm to its eating places as a matter of regulation.

“This attraction presents the query of whether or not allegations that SARS-Co-V-2, the virus that causes COVID-19, was current in insured eating places and resulted in cessation of in-person eating providers and associated enterprise interruption losses are adequate to state a declare for ‘direct bodily loss or harm’, as that phrase is utilized in plaintiff’s property insurance coverage coverage,” Decide Halligan stated within the February 15 courtroom doc seen by Insurance coverage Enterprise.

“We maintain that direct bodily loss or harm requires a fabric alteration or a whole and chronic dispossession of insured property, which petitioner has not alleged. We due to this fact affirm the order beneath dismissing the grievance.”

Decide Halligan additionally acknowledged: “We don’t take evenly the extreme financial losses incurred by eating places and different companies serving the general public on account of the COVID-19 pandemic. However our job is to faithfully interpret the phrases of the insurance coverage coverage earlier than us, to not ‘rewrite the language

of the coverage at concern’ to achieve a outcome with ‘equitable attraction’…

“The protection provisions relied upon by CRO solely cowl financial losses to the extent they’re brought on by ‘direct bodily loss or harm’ to insured property. We conclude that the enterprise interruption brought on by the precise presence of the coronavirus on the premises of CRO’s insured property, as alleged within the grievance, is inadequate to set off such protection.”            

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