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New Jersey Trial Court Allows COVID-Related Business Interruption Claim to Proceed

September 30, 2020: Written by Joseph G Harraka, Esq.

The Bergen County Superior Court recently rejected a defendant insurer’s claim that COVID-19 related losses cannot qualify as covered losses under a business owners’ policy which included coverage for business interruption, and the Court denied the defendant insurers’ motion to dismiss the Plaintiff policyholders’ Complaint. In Optical Services USA/JCI vs. Franklin Mutual Insurance Co., the Plaintiff policyholders asserted they had purchased business interruption insurance coverage to protect their businesses from an “unanticipated crisis” and that such a crisis struck in March 2020 when COVID-19 caused New Jersey Governor Murphy to issue Executive Orders requiring nonessential businesses to close. Plaintiffs alleged that they closed their businesses in compliance with Governor Murphy’s Executive Orders and suffered resulting significant financial losses that were covered by the defendant’s insurance policy.

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