Wade Clark Mulcahy LLP

<p style="text-align: justify;">In numerous suits across the country, judges are dismissing lawsuits seeking pandemic-related insurance coverage.  Recently, Hampshire House Corp., (more commonly known as the owner of the Bull and Finch – the Boston bar that inspired the 1980s classic “Cheers”), brought suit in Massachusetts federal court seeking recovery for pandemic-related losses.</p>
<p style="text-align: justify;">In its complaint, Hampshire House Corp. sued its insurer, Associated Indemnity Corp., along with Fireman’s Fund Insurance Co. and Allianz Global Risks United States Insurance Co., asserting breach of contract, breach of the covenant of good faith and fair dealing, as well as unfair trade practices.  Although Hampshire House’s policy maintained blanket coverage limits exceeding $10 million for business income losses and expenses, the insurers declined coverage for the COVID related losses.  Specifically, the complaint alleged the losses were sustained as a result of closure orders from Governor Charlie Baker and therefore should be covered by the policy.</p>
<p style="text-align: justify;">Ultimately, in <em><a href="https://www.wcmlaw.com/wp-content/uploads/2021/09/Hampshire-House-Corporation-v.-Firemans-Fund-Insurance-Co.-et-al..pdf">Hampshire House Corporation v. Firemans Fund Insurance Co., et al.</a></em>, U.S. District Judge F. Dennis Saylor IV ruled that the presence or threat of the coronavirus does not constitute a direct physical loss of, or damage to, the particular property.  As such, the judge dismissed the complaint without leave to amend.</p>
<p style="text-align: justify;">As more courts rule on similar claims, the case law regarding what COVID related losses will and will not be covered under a policy (a once novel issue) continues to expand.</p>
<p style="text-align: justify;">Thank you to Paige Baldwin for her contribution to this post.  Please email <a href="mailto:chayes@wcmlaw.com">Colleen Hayes</a> with any questions.</p>