The Massachusetts Supreme Judicial Court (SJC) has unanimously ruled that three restaurants cannot recover their business losses due to the COVID-19 pandemic through their property insurance policies – a landmark ruling by a US state supreme court.
The court turned down the lawsuit filed by the restaurants Coppa, Toro, and Little Donkey in 2020, which had argued that they should be entitled to coverage since the virus rendered their respective properties unsafe and unusable.
Justice Scott Kafker wrote in his decision that language in the policies – issued to the three restaurants by Strathmore Insurance – required a specific physical alteration of the property, which would render said property unusable or damaged and in need of repair. However, the virus did no such thing, the judge pointed out. Kafker also cited rulings by nine federal appeals courts in similar cases.
"As demonstrated by the restaurants' continuing ability to provide takeout and other services, there were not physical effects on the property itself," wrote Kafker. "It is only these effects that would trigger coverage under either the property or the business interruption coverage forms."
Reuters reported that the supreme courts in Iowa, Vermont, and Wisconsin are currently hearing arguments in similar cases, but have yet to make a decision.