Most business owners in New York have been faithfully paying significant premiums to insurance companies for years or even decades for business interruption insurance only to see carriers unfairly deny coverage across the board based on the ethereal, undefined "direct physical loss" requirement contained in their business owner's property polices.

While some courts have sided with carriers in dismissing lawsuits stemming from COVID-19 related shutdowns, New York courts need not look further than across the George Washington Bridge for an analysis that falls within the bounds of New York jurisprudence and leaves the door open for coverage that so many business owners desperately need.

In Optical Services USA/JCI v. Franklin Mutual Insurance Co., No. BER-L-3681-20, currently pending in the Superior Court of New Jersey, Law Division, Bergen County, a New Jersey state court correctly denied an insurer's motion to dismiss a business owner's complaint alleging that the shutdown of the business premises by executive order deeming the premises unsafe constituted a direct physical loss for which there was coverage under the subject insurance policy. New York courts would be right to adopt this New Jersey court's reasoning in similar business interruption cases.