COVID Can Cause Covered Physical Damage, Panel Says

David Goodwin's commentary appeared in a Daily Journal article about Coast Restaurant Group Inc. v. Amguard Insurance Co,. a 4th District Court of Appeal ruling holding that COVID-19 can cause direct physical loss damage that would be covered by business interruption insurance. Covington lawyer Rani Gupta drafted an amicus curiae brief on behalf of pro bono client United Policyholders.

"The causation holding in the opinion is a significant victory for policyholders and a significant clarification of the law in California, and I think it will stand at the end of the day," said David.

The decision held that the finding in American Alternate Ins. Corp. V. Superior Court (2006) applied in this case. The Court in American Alternate Ins. Corp. V. Superior Court found that the temporary loss of use due to a government action--in this case, the lockdown order--does constitute a coverable loss.

"That part of the opinion is extremely important, I think, to California policyholders, because it reads the civil authority coverage, I think, as the drafters of the coverage intended it to be read and intended it to be used," David said.

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