One other court docket of attraction rejects COVID BI protection – company insurance

The 10th U.S. appeals court in Denver on Tuesday joined forces with five other federal appeals courts and found there was no business interruption coverage related to COVID-19.

The Denver-based Court of Appeal has ruled against Oklahoma City-based Goodwill Industries of Central Oklahoma Inc. in a lawsuit against Tokyo Marine Holdings Inc.'s Philadelphia Indemnity Insurance Co., which applied for business interruption insurance after it ceased operations in March 2020, following an executive order from the governor of Oklahoma under the ruling in Goodwill Industries of Central Oklahoma Inc v Philadelphia Indemnity Insurance Co. The ruling upheld a ruling by the US District Court in Oklahoma City dated November 2020.

Goodwill's policy said it would pay to suspend operations due to direct physical loss or damage and included a virus exclusion according to the appeals court's ruling.

The District Court upheld Philadelphia's motion to dismiss, on the grounds that "direct physical loss clearly requires evidence of tangible damage," which Goodwill had not alleged, and under the policy's virus exclusion.

In support of the lower court's ruling, a three-person appeals court unanimously said, “The business income provision clearly covers any loss resulting from physical alteration or material expropriation of property. Neither occurred here. The policy restoration clause confirms this conclusion.

"This also applies to the decisions of all other circles and the vast majority of the district courts dealing with this problem," said the ruling, which also held the virus exclusion to be valid and enforceable.

The lawyers on the case did not respond to requests for comment.

The verdict upholds similar judgments from the 6th District Court of Appeals in Cincinnati, the 7th District in Chicago, the 8th District in St. Louis, the 9th District in San Francisco, and the 11th District in Atlanta.

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