Another Supreme Court Favors Insurers In COVID Claims (Business Insurance)

Another Supreme Court Favors Insurers In COVID Claims

  Monday, December 19th, 2022 Source: Business Insurance

The Maryland Supreme Court joined several other state supreme courts Thursday in ruling unanimously that COVID-19 business interruption claims are not entitled to coverage.

New York-based Tapestry Inc., a luxury goods retailer that operates more than 1,400 stores in the U.S. and Internationally, submitted claims to Factory Mutual Insurance Co. under its policies for losses of more than $700 million, according to the ruling by the Maryland Supreme Court in Tapestry Inc. v. Factory Mutual Insurance Co.

Tapestry, which had two all-risk policies with FM that provided a maximum overall limit of liability per occurrence of $1 billion, denied coverage except for communicable disease response and interruption by communicable disease coverages, neither of which is predicated on ‘physical loss or damage’ to property, the ruling said.

The insurer contended that COVID-19 does not cause physical loss or damage or loss and the coverage was barred by contamination exclusion in its policies.

Tapestry filed suit against the insurer in U.S. District Court in Baltimore, which asked the state supreme court to rule on whether there was coverage.

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