As reported by Business Insurance and Law360, a California District Court rejected Endurance American Specialty Insurance’s attempt to limit its coverage of COVID-19-related losses to Sunstone Hotel Investors, the operator of the Boston Marriott Long Wharf and the site of one of the pandemic’s first major “super-spreader” events. Managing Partner Jeffrey Schulman and Partner Kirk Pasich are representing Sunstone in this litigation.
U.S. District Judge Cormac J. Carney determined that Sunstone Hotel Investors’ losses couldn’t be limited to the period before Massachusetts issued its pandemic shutdown order, but instead that the interruption period applied “as long as the virus was a source of Marriott Boston Long Wharf’s business interruption losses.” Unlike most COVID-19 coverage suits that depend on whether “physical loss or damage” was alleged, Sunstone sought coverage under its $40 million site environmental impairment liability policy with Endurance, which included $25 million for “business interruption losses resulting from a virus,” according to the order denying Endurance’s motion for partial summary judgment.
“With almost prescient insight, Sunstone paid a significant premium” for the policy, Judge Carney wrote. “Sunstone’s policy must be interpreted to encapsulate the very thing for which Sunstone seeks coverage.”
Read the Business Insurance article here.
Read the Law360 article here (subscription required).
