The New Hampshire Supreme Court on Thursday joined most other state high courts in ruling against policyholders in litigation over Covid-19 business interruption.
The unanimous decision of the state supreme court in Schleicher and Stebbins Hotels, LLC v. Starr Surplus Lines Insurance Co. a. alwhich was saved by 23 hotels against seven insurers, overturned a lower court decision that had granted the plaintiffs partial summary judgment.
As was the case in other policy-friendly decisions in the matter, a three-judge panel of the New Hampshire court held that the presence of the COVID-19 virus on the hotel’s premises did not cause “direct physical loss of or damage to property”; under the “hotel’s” coverage.
“The fact that the property may become a vector for the transmission of a virus that poses a risk to human health due to the presence of SARS-CoV-2 in the air on the property is not relevant to the question of whether there has been “physical loss of or damage on property,” because the policies insure property, not people,” the ruling said.
“Although a ‘distinct and detectable’ physical change need not necessarily be visible and changes at the microscopic level may in some circumstances meet this threshold, the mere attachment of molecules to surfaces does not change the property in a distinct and detectable way,” the ruling said, by to reverse the lower court and remand the case.
Attorneys in the case did not respond to requests for comment.
In March, the Louisiana Supreme Court overturned a state appeals court decision in favor of policyholders, ruling in a split opinion that policyholders are not entitled to COVID-19-related business interruption coverage.
The Vermont Supreme Court is the only state supreme court to date to rule in favor of a policyholder.