The Massachusetts Judicial Supreme Court on Thursday joined federal appellate courts in ruling on policyholders in a case of covid-19 business interruptions, and became the first state supreme court to rule on the issue.
The unanimous ruling was in a lawsuit filed by three restaurants in Boston and Cambridge under joint ownership against Strathmore Insurance Co., a unit of Greater New York Mutual Insurance Co., according to the ruling in Verveine Corp. et. al v. Strathmore Insurance Co. et al.
The judgment establishes a decision of a court. The Massachusetts Supreme Court heard the case without first waiting for a state appellate court to rule on the matter.
As with its federal counterparties, the Massachusetts High Court held that the plaintiff was not entitled to coverage because they had not determined that the virus had caused direct physical loss, as required by its coverage.
“We agree that the plaintiffs̵7; losses were not ‘direct physical loss of or damage to’ their property within the meaning of the insurance policies,” the decision stated.
“We conclude that no reasonable interpretation of direct physical loss of or damage to property supports the plaintiffs’ claim.”
“Direct physical loss” requires some “distinctly demonstrable physical alteration of the property,” it said in an earlier case. the.
“Even accept the plaintiffs’ premise that the suspension of their activities was caused by the ‘presence’ of the virus on surfaces and in the air in restaurants (as opposed to the risk of the virus being introduced into restaurants to the person person if allowed to eat indoors), “presence alone” does not mean loss or damage to the property “, it was stated in the judgment.
Lawyers in the case did not respond to requests for comment.