Covid 19/No Physical Loss or Damage

SFMB Management v. Starr Surplus Lines Insurance Co., docket No. 653203/2021 (Supreme Court of the State of New York, New York County, January 20, 2022)

On January 20, 2022, the Supreme Court of the State of New York’s Justice Debra James granted MCWG’s client their motion to dismiss insurance coverage claims. The dismissal rests on the ground that the impact of COVID-19 on the plaintiff, SFMB Management, does not qualify for the kind of coverage described as “limited to instances where the insured’s property suffered direct physical damage.”

This case is another example of recent litigation where companies seek the physical loss coverage for interruptions that the coronavirus has caused businesses. Justice James’ decision aligns with precedent cases’ opinions that business interruptions due to COVID-19 do not meet the requirement of “direct physical loss.”

Starr Surplus Lines Insurance Company is represented by Jeffrey S. Weinstein, Craig R. Rygiel, and Samuel B. Weiss.

You can read the order here. This case was also reported in Law360.


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