Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of August 15, 2022

Courts Dismiss COVID-19 Business Interruption Claims

On August 11, 2022, the Fourth Circuit affirmed a grant of judgment on the pleadings to Illinois Union Insurance Company on a buffet franchise’s COVID-19 business interruption claims. The court applied its decision in Uncork & Create LLC v. Cincinnati Insurance Company, 27 F.4th 926 (4th Cir. 2022), which held that losses caused by the COVID-19 pandemic were not covered absent material destruction or material harm to the insured premises. The case is Golden Corral Corp. v. Ill. Union Ins. Co.

On August 8, 2022, the Superior Court of California granted Factory Mutual Insurance Company’s motion to strike portions of a complaint filed by nineteen National Hockey League clubs for losses resulting from the COVID-19 pandemic and denied its demurrer. Citing United Talent Agency v. Vigilant Ins. Co., 77 Cal. App. 5th 821 (2022), the Court found that plaintiffs failed to allege covered physical loss or damage due to COVID-19, although it allowed the plaintiffs’ claim for communicable disease coverage to survive Factory Mutual’s demurrer. The case is San Jose Sharks LLC, et al. v. Factory Mut. Ins. Co., et al.