New Jersey Supreme Court to rule on pandemic-related insurance exclusions
New Jersey’s Supreme Court is considering whether an Atlantic City casino can get payouts from business interruption insurance for losses during the COVID-19 outbreak
TRENTON, N.J. — New Jersey's Supreme Court is considering whether an Atlantic City casino can get payouts from business interruption insurance for losses during the COVID-19 outbreak, potentially providing guidance for policyholders nationwide regarding the scope of coverage for pandemic-related losses.
The state's high court heard arguments Wednesday in a case brought by the owners of the Ocean Casino Resort, which had $50 million in business interruption insurance before the 2020 virus outbreak.
Three insurers — AIG Specialty Insurance Co., American Guarantee & Liability Insurance Co. and Interstate Fire & Casualty Co. — 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 issue has arisen in state and federal 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.
“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 papers.
Lawyers for the insurance companies argued that their policies clearly included viruses among the list of things that could be
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