Credit: Mehaniq/Shutterstock Federal Judge Relies on 'Overwhelming Body of Unfavorable Case Law' in Rejecting COVID-19 Business Interruption Claims
"In sum, in the face of clear and unambiguous policy language and an overwhelming body of unfavorable case law, including recent decisions from this circuit and Massachusetts' highest appellate court, CSI's attempts to create an ambiguity and advance a favorable interpretation of the business income provision necessarily fail," U.S. District Judge Allison Burroughs of the District of Massachusetts wrote July 8.
July 12, 2022 at 02:12 PM
5 minute read
What You Need to Know
- Creative Services Inc. filed a lawsuit against its insurer in U.S. District Court for the District of Massachusetts alleging breach of contract for its denial of coverage under commercial business insurance.
- The district court relied on the Massachusetts Supreme Judicial Court's reasoning in 'Verveine' and three holdings from the First Circuit to side with the insurance company.
- The district court cited other cases that ultimately reached the same ruling.
Relying on guidance from federal and state appeals courts—including the Massachusetts Supreme Judicial Court—the U.S. District Court for the District of Massachusetts has ruled that COVID-19 shutdown orders do not fall under the definition of "direct and physical loss to property" in a business interruption insurance policy.
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