A New Jersey state court recently rejected an insurer’s claim that COVID-related losses cannot qualify as covered losses. In Optical Services USA/JCI v. Franklin Mutual Insurance Co., No. BER-L-3681-20, pending in the Superior Court of New Jersey, Law Division, Bergen County, the policyholders assert they purchased business interruption insurance coverage to protect their businesses from an “unanticipated crisis.” They contend such a crisis struck in March 2020, when the novel coronavirus spread across the globe, causing governments—including the State of New Jersey—to take dramatic action. Specifically, Governor Murphy issued Executive Orders requiring nonessential businesses to close and ordering residents to stay home. Plaintiffs allege they closed their businesses in compliance with Governor Murphy’s orders and, as a result, suffered significant financial loss covered by their insurance policies.
9.18.2020