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Exclusion clauses for business interruptions – Blog about the law on property insurance protection



It is known that Hurricane Maria's passage through Puerto Rico in 2017 not only caused structural damage but also other damage that disrupted many public and private services for months. Many companies had to shut down or limit their services and many had to file a claim based on business interruption coverage.

This was the case in Ortiz Optometric Care LLC v. Universal Insurance Company . . 1 In Ortiz the insured was closed for 19 days after Hurricane Maria and filed a claim for business interruption with his insurer. The insurance company denied interruptions in operations by applying an exemption clause under the insurance. Universal claimed that the business interruption was not caused directly by Hurricane Maria and that the loss was not covered by the exemptions in the insurance. Therefore, Universal filed a summary judgment seeking dismissal, claiming that 32 facts in the complaint against them were not in controversy. In response, the insured stated that the reason for the outage was dispute and that a summary judgment would not be issued until evidence had been presented. The plaintiff must show that the winds and rain from Hurricane Maria caused the loss and not the cleaning of the debris found in the parking lot of the condominium where the office is located. The plaintiff also claimed that due to the roof damage to the building, water leaked into the office and caused a closure for several days.

Hurricane Maria may not be a direct cause under the policy of granting business interruption protection. The Optometry Office was closed for 1

9 days from 20 September 2017 to 16 October 2017 due to the direct damage caused by Hurricane Maria, but it was not controversial that on 13 October 2017 the building was open to the public and provided water and electricity services.

The Court of Appeal upheld the district court's ruling which rejected the insurer's request for termination and held that the only controversy in this case was whether the office was closed for the period of 19 days due to direct damage caused by Hurricane Maria.
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1 Ortiz Optometric Care LLC v. Universal Ins. Co. 2021 WL 4205866 (2021).


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