According to courtHotels that close or lose business due to coronavirus are not covered by property insurance because their losses were not caused by damage to their property, the state court of appeals ruled in California’s first decision on appeals in California over a serious dispute between insurance brokers and many others. of their customers.
The case involves five hotels in San Mateo and Monterey districts that closed in March 2020 after officials in both states, and some in California, ordered all businesses except those considered “essential” to suspend operations, except for basic services.Most regional hotels remain open, but attract few visitors.
The closed hotels were reopened after state and local officials increased their residential orders, but continued to lose visitors and revenue.
Inns-by-the-Sea, which owns five hotels – four in Carmel-by-the-Sea and one in Half Moon Bay – has filed a lawsuit after California Mutual Insurance claimed the hotel’s financial losses were not linked to hotel sales. building policies.
Those policies provide suspension benefits resulting from “direct physical loss or damage to property on the premises (policy holder).”Similar disputes have been heard by state courts across the country, including the U.S. Ninth District Court in San Francisco, which ruled last month that a San
Francisco children’s store was not entitled to business insurance under California law for losses incurred due to asylum orders by state and local authorities on March 2020.