New Jersey Supreme Court rules against Ocean casino in COVID business interruption case
Here's a rare case of a casino losing
ATLANTIC CITY, N.J. — New Jersey's Supreme Court ruled Wednesday that an Atlantic City casino is not entitled to payouts from business interruption insurance for losses during the COVID-19 outbreak, determining that the presence of the virus did not constitute the kind of “direct physical loss or damage” required for such a payout.
The case involved the Ocean Casino Resort's claims against three insurance companies — AIG Specialty Insurance Co., American Guarantee & Liability Insurance Co. and Interstate Fire & Casualty Co. Those insurers largely denied payouts to the casino, saying it did not suffer direct physical loss or damage because of the virus.
The casino sued and defeated an attempt by the insurers to dismiss the case. But that decision was reversed by an appellate court.
The high court agreed to take the case in order to resolve the legal question of what constituted loss or damage.
“Based on the plain terms of the policies, we conclude that in order to show a ‘direct physical loss’ of its property or ‘direct physical... damage’ to its property under the policy language at issue, (parent company AC Ocean Walk LLC) was required to demonstrate that its property was destroyed or altered in a manner that rendered it unusable or uninhabitable,” the court wrote in a unanimous decision.
“At most, it has alleged that it sustained a loss of business during the COVID-19 government-mandated suspension of business operations because it was not permitted to use its property as it would otherwise have done,” the opinion read.
It concluded that the casino's pleadings “do not support a finding that it is entitled to insurance coverage.”
The casino declined comment Wednesday.
The ruling
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