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Insurers’ COVID-19 Notepad: What You Need to Know Now - Week of November 7, 2022

Client Alert | 2 min read | 11.07.22

Courts Dismiss COVID-19 Business Interruption Claims

On October 31, 2022, the district court for the District of New Jersey granted American Guarantee and Liability Insurance Company’s motion to dismiss a healthcare provider network’s COVID-19 business interruption claim. The court concluded that the plaintiff failed to state a claim for business interruption by communicable disease coverage because the relevant COVID-19 related executive order “restricted certain activities on the Insured Location but did not prohibit access to the Insured Location as is required to trigger coverage under the [business interruption by communicable disease coverage].” Order at 10. The case is Inspira Health Network v. Am. Guar. & Liab. Ins. Co.

On October 31, 2022, the district court for the Central District of California granted Federal Insurance Company’s motion to dismiss a deli owner and operator’s COVID-19 business interruption claims. The court found that “binding appellate authority” held that COVID-19 pandemic losses did not constitute physical loss or damage. Order at 5-7. The case is Roy Kavin, Inc. v. Fed. Ins. Co.

On October 27, 2022, the district court for the Eastern District of California granted Illinois Union Insurance Company’s motion to dismiss an eye care company’s COVID-19 business interruption claims. The court found the plaintiff’s proposed reading of its “pollution condition” coverage would lead to “absurd results.” Order at 6. The court therefore held the plaintiff failed to demonstrate its claim was covered and dismissed all causes of action. Id. at 7. The case is Vision Serv. Plan v. Ill. Union Ins. Co.

New Business Interruption Suits by Insurers:

Several insurers sued a resort management company in New Jersey state court (Cape May County) for declaratory relief in a COVID-19 business interruption dispute. The policy allegedly contains business income, extra expense, and ingress or egress coverage and excludes loss or damage caused by “indirect or consequential loss of any kind” or by pollution or contaminants. Complaint ¶ 28. The insurers seek a declaratory judgment the policyholder is not entitled to coverage because the coronavirus and the corresponding stay-at-home orders did not cause “direct physical loss or damage.” Id. ¶ 53. The case is Swiss Re Corp. Solutions Capacity Insurance Co. v. Cape Resorts Management Co.

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Client Alert | 6 min read | 03.26.24

California Office of Health Care Affordability Notice Requirement for Material Change Transactions Closing on or After April 1, 2024

Starting next week, on April 1st, health care entities in California closing “material change transactions” will be required to notify California’s new Office of Health Care Affordability (“OHCA”) and potentially undergo an extensive review process prior to closing. The new review process will impact a broad range of providers, payers, delivery systems, and pharmacy benefit managers with either a current California footprint or a plan to expand into the California market. While health care service plans in California are already subject to an extensive transaction approval process by the Department of Managed Health Care, other health care entities in California have not been required to file notices of transactions historically, and so the notice requirement will have a significant impact on how health care entities need to structure and close deals in California, and the timing on which closing is permitted to occur....