In a well reasoned decision, the Superior Court in California denied the insurer's motion for judgment on the pleadings on a business interruption claim arising from COVID-19. Boardwalk Ventures CA, LLC v. Century-National Ins. Co., et al., 2021 Cal Super. LEXIS 35 (Cal. Super. Ct. March 18, 2021). The decision is here.
The insured operated a restaurant. After the pandemic struck and shut-down orders were issued, the insured submitted a claim for losses due to the suspension of its operations due to COVID-19. The insured sued after the claim was denied and the insurer moved for judgment on the pleadings.
The insurer argued as a matter of law, that the insured could not allege the "direct physical loss of or damage to property" required for coverage under the policy. But the court found that the insured alleged such physical losses or damage based on COVID-19. The complaint alleged that "the virus can be present outside the human body in viral fluid particles, and can be transmitted and active on inert physical surfaces for a period of time." Further, "the presence of the virus particles renders items of physical property unsafe and impairs its value, usefulness and normal function." And finally, "the presence of people infected with the virus particles renders physical property in their vicinity unsafe and unusable, resulting in direct physical loss to that property." The insurer, in turn, cited no authority that had determined, as a mater of law, that these allegations were insufficient.
Therefore, the motion for judgment on the pleadings was denied.
