The Oklahoma Supreme Court on Monday became the sixth state high court to rule against policyholders in Covid-19-related business interruption coverage when it issued a ruling against the Cherokee Nation.
The 6-3 ruling, in a case filed by the Cherokee Nation against numerous insurance companies, overturned a lower court ruling in favor of the plaintiffs.
On January 14, in a brief ruling, an Oklahoma state judge in Tahlequah refused to dismiss the case, Cherokee Nation; Cherokee Nation Businesses LLC; Cherokee Nation Entertainment LLC v. Lexington Insurance Co .and concluded that the plaintiffs had made a “plausible claim for an accidental ‘direct physical loss'”
; and that the defendants had not shown that the “exclusionary language of the policy applies to the facts.”Overturning that decision, the Oklahoma Supreme Court’s majority opinion said: “The district court’s expansion of business interruption coverage ignores the policy’s clear, unambiguous language and the decisions of nearly every circuit court, many federal district courts, and state courts that have held that business interruption coverage requires actual, tangible loss or damage to property, not just loss of use.”
The dissenting opinion said the majority’s “conclusions effectively coat a named risk policy into an all risk policy that lacks relevant definitions and exclusions and transforms an interruption policy into something other than fire insurance.”
Attorneys in the case had no comment or did not respond to a request for comment.
Other state supreme courts that have ruled against policyholders in similar cases include Iowa, Massachusetts, South Carolina, Washington and Wisconsin.
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