Environmental policy may cover COVID-19 interruption requirements: court

A Sompo International Holdings Ltd. entity wrongly bound its denial of a hotel investment firm's COVID-19 business interruption claim to a separate reorganization provision in its environmental policy, a federal court ruling. Hotel Investors Inc., an investment trust with 20 hotel properties, including Marriott Boston Long Wharf, had an "environmental damages" policy from Sompo Endurance America Specialty Insurance Co., according to Friday's ruling Sunstone Hotel Investors Inc. v Endurance American Specialty Insurance Co.

In February 2020, Marriott hosted an international meeting of leaders from Cambridge, Massachusetts-based Biogen Inc., a biotechnology company.

After the Centers for Disease Control and Prevention, Sunstone announced in March that three participants tested positive for coronavirus, the hotel closed for several months. The conference was then considered a superspreader event that led to more than 20,000 cases of coronavirus globally. self-insured retention for remediation costs.

The trust sued Endurance and the U.S. District Court in Santa Ana, California, ruled in Sunstone's favor.

The policy "does not make it clear, express and unambiguous" that I -insured retention for reorganization coverage applies to business interruption coverage, they said. Nowhere in the insurance section on business interruption "does it say that an insured must incur $ 1

00,000 in remediation costs to trigger" business interruption coverage, "the decision says. -insured retention "does not apply" to business interruption coverage, "and that only a 3-day waiting period applies instead", was mentioned in the decision to deny the insurer's proposal to reject the complaint.

Lawyers in the case respond to requests for comment.

More insurance and risk management news about the coronavirus crisis here .

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