ANOTHER PLANET ENTERTAINMENT V. VIGILANT INSURANCE COMPANY, No. 21-16093 (9th Cir. 2022)
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This case involves an insured who sued for breach of contract, bad faith, and fraud when its insurer denied coverage for business income losses that the insured incurred following government closure orders issued during the COVID-19 pandemic. The insured alleged that the COVID-19 virus was present on its premises before the orders were issued, or would have been present had the insured not closed its venues in compliance with the orders, and it sought coverage under several provisions of its commercial property insurance policy that require “direct physical loss or damage to property” to trigger coverage. The district court dismissed the insured’s suit for failure to state a claim.
The Ninth Circuit certified the following question to the California Supreme Court: Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute “direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy?
Court Description: California Law. The panel certified the following question to the California Supreme Court: Can the actual or potential presence of the COVID-19 virus on an insured’s premises constitute “direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy?
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