In a matter of first impression, DLA Piper argued before the key First Department of the New York Appellate Division the question of whether COVID-19 claims are covered under a property policy.
In this matter, which began in Westchester County but was transferred to New York County by Westport, Consolidated Restaurant Operations (CRO) sought to recover the $50 million limits under the insurance contract issued by Westport Insurance Corporation. CRO claimed that it suffered extensive financial losses due to an array of issues arising from the pandemic: restrictions on its restaurant operations enacted by governments; government negligence; the pandemic itself; and the threatened or actual presence of the virus in its restaurants. CRO claimed that the presence of COVID-19 on its property caused “direct physical loss or damage” to the property. It claimed that all coverages in the insurance contract were thus triggered and sought the full $50 million policy limit.