COVID-19 Business Interruption Claim under Environmental Policy Survives

September 5, 2022
Tred R. Eyerly - Insurance Law Hawaii

The court determined there was coverage for business interruption due to COVID-19 under an Environmental policy. Sunstone Hotel Investors, Inc. v. Endurance American Spec. Ins. Co., 2022 U.S. Dist. LEXIS 11147 (C.D. Cal. June 15, 2022).

Sunstone was a real estate investment trust that had an interest in 20 hotel properties with 10,000 guest rooms across the United States. In 2017, Sunstone purchased a "Site Environmental Impairment Liability Coverage" policy from Endurance. The policy provided $25,000,000 of coverage for business interruption losses caused by a biological agent. Coverage D provided that Endurance would pay "the Insureds' Business Interruption Losses and Extra Expenses during the Interruption Period that directly results from . . . Biological Agent Conditions . . ." There was no dispute that COVID-19 was a Biological Agent, but the parties disagreed on coverage provided under Coverage D.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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