Insurers Win, Lose COVID-related Business Interruption Rulings

The Washington Supreme Court became the fifth state supreme court to rule in insurers’ favor Thursday in COVID-related business interruption litigation when it unanimously ruled against a dental practice.

But a California appeals court on Thursday overturned a lower court ruling and held that a nail salon was entitled to business interruption coverage under its Lloyd’s policy.

The Washington case, which affirmed a lower court ruling, was filed by a dental practice with offices in Oak Harbor and Anacortes, Washington against Enumclaw, Washington-based Mutual of Enumclaw Insurance Co. according to the ruling in Hill and Stout PLLC v. Mutual of Enumclaw Insurance Co.

As with comparable rulings, the Olympia-based supreme court held there was no direct physical loss, as required for by its coverage.

‘It is unreasonable to read ‘direct physical loss of …property’ in a property insurance policy to include constructive loss of intended use of property,’ the ruling said.