Restaurant entitled to business interruption cover: State appeals court

Business Insurance

A Louisiana state appeals court overturned a lower court Wednesday in a divided opinion and held that a New Orleans restaurant is entitled to COVID-19-related business interruption coverage because of ambiguous policy language. 

In February 2021, following a bench trial, which was the first trial to be held on the issue, a Louisiana state judge ruled in favor of Lloyd’s of London underwriters in a case filed by the owner and operator of the Oceana Grill in New Orleans’ French Quarter, in Cajun Conti LLC et. al. v. Certain Underwriters at Lloyds, London et al.

It is the second state appeals court ruling in as many days to rule for policyholders, following dozens of federal appeals court rulings that held in insurers’ favor, including several by the New Orleans-based 5th U.S. Circuit Court of Appeals. 

On Tuesday, a New York appeals court upheld a lower court decision and ruled that the New York Botanical Garden is entitled to COVID-19-related business interruption coverage from an Allied World Assurance Co. Holdings Ltd. unit.

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Marshall Gilinsky, an insurance recovery attorney and shareholder at Anderson Kill P.C. in New York, who is not involved in the case, said in a statement that “while federal courts of appeals have ruled that the virus does not constitute physical loss or damage, case law from many state courts suggests otherwise, and state courts have been more receptive to businesses’ COVID-19 claims.” 

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