No Physical Loss or Damage
New Jersey Superior Court Judge Steven Polansky awarded a full dismissal of COVID-19 business interruption claims. The policyholder failed to show that the presence of COVID-19 caused physical loss or damage required to qualify for coverage.
“The mere presence of the coronavirus at or in the insured locations … is insufficient to establish property damage,” Judge Polansky wrote. “It is governmental orders which caused plaintiffs to be unable to fully utilize their property, not physical casualty to the property.” In rejecting Wawa’s claims against a group of multiple insurers, Judge Polansky joined a long line of courts at all levels that have found that the virus and related government shutdown orders do not cause physical loss or damage, which most “all-risk” insurance policies require.”
The court’s decision aligns with growing precedent; as Costantino Suriano stated earlier in the case,
“We have said this to you in many ways, but more importantly the two appellate court decisions of this week absolutely make this clear that there was no distinct demonstrable alteration in the property.”
The Order granting dismissal can be read here.
The decision was reported in Law360, “Wawa Loses NJ Bid for Virus Business Interruption Coverage,” on June 30, 2022.