New Jersey Supreme Court is expected to rule whether an Atlantic City Casino- Ocean Casino Resort can get payout from three insurers- AIG Specialty Insurance Co.., America Guarantee & Liability Insurance Co.., and Interstate Fire & Casualty Co.
These insurers largely denied coverage to the casino, saying it did not suffer direct physical loss or damage because of the virus.
Last year the supreme Court agreed to resolve some questions regarding the case.
New Jersey Supreme Court To Rule On Pandemic
A generational legal dispute that present legal questions which the supreme Court agreed to resolve whether a claim that the Coronavirus physically damaged insurred property is enough to allege ” direct physical loss of or damage to ” it and whether insurers can legally restrict coverage for pandemic-related losses by mentioning viruses in general pollution or contamination.
The state High Court is expected to hear arguments over the claim on Wednesday September 27th in a case brought by the owner of the Casino Resort- which had $50 million in business interruption insurance before the outbreak of the virus.
Last year, Appellate Panel of the Superior Court of New Jersey said Casino in New Jersey did not suffer direct physical loss of or damage to insured physical property as a result of pandemic.
The Appellate Court ruled that operator of the Ocean Casino Resort not entitled to cover pandemic-related business losses with proceeds of insurance policies.
The Casino sued and defeated an attempt by insurers to dismiss the case. But the decision was reversed by an Appellate Court.
“This case presents a generational legal dispute that this court should resolve in order to provide needed clarity to hundreds of thousands of affected New Jersey policyholders and their insurers regarding the scope of coverage for losses arising from the pandemic” Ocean wrote in court paper.
New Jersey Governor Phil Murphy issued an executive order in March 2020 closing the casino until early July of the year due to the pandemic.
The Casino sought payout for losses incurred during that time under policies from the three insurers.
“The actual and/ or threatened presence of Coronavirus particles at the ocean Casino Resort rendered physical property within the premises damaged, unusable, uninhabitable, unfit for its intended function, dangerous and unsafe” the casino wrote in court paper.
“The ruling sort by the (Insurers) would curtail coverage for million of New Jersey policyholders”. It wrote “The Insurance industry at large understood prior to the COVID-19 pandemic, that the presence of a virus or any dangerous substance,or the imminent risk of its presence at (an) insurred property was capable of satisfying their own understood meaning of ‘physical loss or damage’ to physical property.
United policyholders, an advocacy group for Insurance customer urges the justices in a friend-of – the – court brief to rule in favour of the casino.
Similar case surrounding situation like this has been raised in state and federal high courts around the country, including cases where payouts were denied involving a chain of California movie theaters; a Los Angeles real estate firm, a group of hotels in Pennsylvania, and a group of hotels and a law firm in New Jersey.
The COVID-19 pandemic reached the US state of New Jersey with the first confirm case occuring in Bergen county on March 2, 2020, and testing positive on March 4.
As of January 11, 2022, 1.63 million cases were confirmed in the state, incurring 26,795 deaths.
As a result of the COVID-19 pandemic, business activities and social activities were grounded which affected many private firms and government activities within and outside the US state of New Jersey.
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