Denial of Insurer’s Motion to Dismiss COVID-19 Case Affirmed

    The Appellate Division of the Supreme Court of New York affirmed the lower court’s denial of the insurers motion to dismiss COVID-19 claims. Tina Turner Musical LLC v. Chubb Ins. Co. of Europe SE, 2022 N.Y. App. Div. LEXIS 6758 (N.Y. App. Div. Dec. 6, 2022). The case is  here. 

    The insured sought policy benefits for losses due to the cancellation of its Broadway show during the COVID-19 pandemic. Chubb denied the claim under the policy’s communicable disease exclusion. The exclusion precluded coverage for:

[A]ny loss directly or indirectly arising out of, contributed to by, or resulting from . . . any communicable disease or threat or fear of communicable disease . . . which leads to: (1) the imposition of quarantine or restriction in movement of people or animals by any national or international body or agency; (2) any travel advisory or warning being issued by a national or international body or agency.

    The exclusion did not clearly and unmistakably preclude from coverage losses caused by communicable diseases that were of such a systemic nature as to lead to quarantine or travel advisory orders by a national or international body or agency. The court found that it precluded from coverage losses resulting from quarantine or travel advisory orders issued by a national or international body or agency in response to a communicable disease. Here, the insured’s losses stemmed from Executive Orders issued by the New York State Governor and New York City Mayor banning performances and gatherings in theaters. Therefore, the exclusion did not apply. 

    The insured’s claim for consequential damages was adequately pled and the denial of Chubb’s motion to dismiss was affirmed.