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New Jersey appeals court upholds six COVID rulings for insurers

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appeals

A New Jersey state appeals court, ruling on six COVID-19-related business interruption cases, held Monday that policies issued by several insurers did not cover business losses incurred by policyholders that were forced to close or limit their operations because there was no physical loss or damage.

A three-judge panel of the Superior Court of New Jersey appellate division in Jersey City ruled that the lower courts were correct “in dismissing plaintiffs’ complaints with prejudice … because plaintiffs’ business losses were not caused by physical loss or damage to their property, as required for coverage under their insurance policies with defendants, but by restrictions imposed by (the governor’s executive orders) to curb the COVID-19 global health crisis.” The case is Mac Property Group LLC & The Cake Boutique LLC v. Selective Fire and Casualty Insurance Co. et. al.

“We discern no reason to depart from the persuasive reasoning expressed” in earlier COVID-19-related rulings by federal and state appeals courts that rejected similar claims, the panel said, adding the plaintiffs’ insurance claims “are restricted by the clear and plain meaning of their insurance policies, which we cannot rewrite to cover their unfortunate losses.”

Attorneys in the case had no comment or did not respond to requests for comment.

Policyholder attorneys say a Louisiana appeals court’s refusal to dismiss policyholder litigation in a COVID-19-related business interruption case is a significant ruling and is expected to be influential.