Delaware Superior Court Finds Pollution Exclusion Precludes Coverage For COVID-Related Claims

The Delaware Superior Court recently dismissed an amusement park operator’s bid for property damage insurance coverage for COVID-19 related losses.

Judge Abigail M. LeGrow granted HDI Global Insurance Company’s (HDI) motion to dismiss the complaint filed by APX Operating Company LLC (APX), the operator of six entertainment properties and two waterparks in California, Florida and New Jersey (Insured Properties), that sought coverage for lost revenue and profits when the properties were shut down for a period of time as a result of the COVID-19 pandemic, and once reopened were forced to operate at reduced capacity.

The court’s decision side-stepped the question of whether the presence of SARS-CoV-2 virions on the properties were ‘direct physical loss or damage,’ triggering coverage under the policy, but nevertheless found that there was no coverage for the claimed losses based on the policy’s Pollution and Contamination Exclusion.