California Judge Rules In Favor of Insurer, Upholding Policy’s Virus Exclusion
April 29, 2021

This week in California, U.S. District Magistrate Judge Jacqueline Scott Corley ruled in favor of the insurance industry in a lawsuit on pandemic-related business interruption (BI) claims—filed by attorneys representing two Napa Valley-based French restaurants—on the basis that the virus exclusion precludes coverage for losses caused by the COVID-19 pandemic.
“While the court acknowledges the havoc that the COVID-19 pandemic and consequent shelter-in-place orders have caused businesses throughout this country and the world, the court cannot read an ambiguity into an insurance contract where none exists,” Judge Corley said.
This California ruling adds to the growing list of favorable rulings over the last year affirming insurers’ position that global pandemic risks are uninsurable. Insurers are doing what they can in response to the pandemic, including providing premium rebates, policy extensions, and making charitable donations, as they work to keep their promises to policyholders for covered losses.
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