A New Jersey court recently rejected an insurer's proposal to dismiss a COVID-19 business interruption case brought by a group of optometry practitioners to find unshakable questions under New Jersey law about whether loss of a property's functional use could constitute "direct physical loss ”According to a real estate policy. Optical Services USA / JC1 v. Franklin Mutual Ins. Co. No. BER-L-3681-20 (NJ Super. Ct. Bergen Cty. 13 August 2020) (transcript). Based on this, the court found that the opticians had the right to issue informed discovery and to change their complaint accordingly. Cause of loss under the insurance. Instead, they argued that New Jersey case law states that property can sustain physical loss without structural change. See Wakefern Food Corp. against Liberty Mut. Fire. Ins. Co. 406 N.J. Super. 524, 968 A.2d 724 (App. Div. 2009) (to find a power grid suffering from non-structural damage was "physically damaged" because "the grid and its component generators and transmission lines were physically unable to perform their essential function of [1
Finally, even if the policy contained a virus, exception, the insurer did not try to rely on it in this case. the adviser to the insurer explained in oral arguments, the exclusion was not applied under the facts of this loss, which was due to the pandemic risk of virus proliferation rather than the virus itself. Other insurers have tried to apply the same or similar virus exemptions to a greater extent, ignoring the clear meaning of the exemptions and avoiding their obligation to apply exemptions narrowly.