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The insurer wins another decision on Covid BI in the Court of Appeal



The 2nd U.S. Circuit Court of Appeals in New York became the latest federal appellate court last week to rule that a policyholder was not entitled to covid-related business interruption protection, in a case brought by an art gallery in New York against a Hartford Financial Services Insurance Group Inc. Unit

As in other federal appellate court decisions, the second circuit was held in last Monday's judgment in 10012 Holdings Inc. DBA Guy Hepner v. Sentinel Insurance Co. Plaintiff was not entitled to coverage because it had not established that the virus had caused physical harm. judgment in December. 22.

The ruling, which upheld a December 2020 decision of the New York District Court in New York, stated that the plaintiff claimed that it was entitled to coverage under the provisions on business income and additional costs of its policy because its use of the term "direct physical loss ", which is undefined," obviously includes circumstances where 1

0012 Holdings is only deprived of access to its commercial property. But New York law forces us to reject 10012 Holdings' proposed reading of the term. "

The ruling cites a 2002 case in which a state court ruled against a theater company claiming it was entitled to surveillance of business interruptions because its theater was made inaccessible to the public for several weeks due to its street being closed after a building accident.

A state appellate court ruled in that case that the insurance "clearly and unequivocally provides coverage only where the insured's property suffers direct physical k damage ", a three -Judge appellate court panel said.

" We are following this possession, "the panel said. "We are not aware of any opposing authority in New York deviating" from possession in that case.

The panel also refused to ask the state Supreme Court, the New York Court of Appeals, to consider the case. "If there was disagreement in the lower New York courts, certification may still be justified, but as we have already noted, every New York court that interprets the phrase 'direct physical loss' has read it in the same way and denied coverage," he said. it is stated in the judgment.

Actors in the case did not respond to requests for comment.

In addition to the 10th Circuit, the judgment confirms similar rulings issued by the 6th U.S. Circuit Court of Appeals in Cincinnati, the 7th Circuit in Chicago. , the 8th Circuit in St. Louis, the 9th in San Francisco and the 11th in Atlanta.


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