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Cherokee Nation wins summary judgment in COVID-19 business break



In a resounding victory for policyholders, a state court in Oklahoma granted a partial summary judgment for the Cherokee Nation in its COVID-19 business interruption. Cherokee Nation seeks cover for losses caused by the pandemic – specifically the inability to use many parent companies and services for the intended purpose.

Based on the "all risks" nature of the policy and the temporary nature of its loss. The Cherokee nation sought a partial summary judgment stating that the policy provides business interruption coverage for COVID-19-related losses. The policy provided coverage for "any risk of direct physical loss or damage," as the Cherokee Nation claimed, was triggered when the property "was rendered unusable for its intended purpose." In support of this view and in accordance with established principles for the interpretation of insurance policies, such as giving meaning to each term and reading the policy as a whole, the Cherokee Nation argued that there must be a distinction between "physical loss" and "physical injury." This difference requires an interpretation that supports the "intended purpose" of reading the policy language. Thus, the physical presence of COVID-1

9 which deprived the Cherokee Nation of the use of covered property for the intended purpose triggered a covered loss. , added exceptions to their policy that specifically prevents coverage for infectious disease, but did so only after other policyholders filed similar claims for COVID-19 losses. Such exclusions would be superfluous if infectious disease coverage was not covered under the original policy language.

The court agreed and considered that the Cherokee Nation had made a "probable claim" under its full risk policy for business interruption coverage, insurers failed to show any exceptions would cover the coverage. In support of its decision, the Court quoted the last policyholder's profit in the case Elegant Massage LLC v State Farm (discussed in an earlier post on this blog) and confirmed the Court's broad reading of the phrase "direct physical loss" to assert a reasonable claim for coverage of business interruptions.


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