Justia New Jersey Supreme Court Opinion Summaries

Ocean Walk, LLC, a company that operates a casino and other entertainment facilities in New Jersey, sought coverage under its commercial property insurance policies for losses sustained during the COVID-19 pandemic. The company claimed that the presence of the virus in its facilities and the government-mandated temporary suspension of its operations constituted a “direct physical loss” or “direct physical damage” to its property under the terms of the insurance policies issued by several defendants. The Supreme Court of New Jersey, however, disagreed with this interpretation and held that Ocean Walk’s allegations failed to meet the policy language's requirements. The court ruled that to demonstrate a “direct physical loss” or “direct physical damage,” Ocean Walk needed to show that its property was destroyed or altered in such a way that rendered it unusable or uninhabitable. The court noted that the company’s allegations did not suggest that the property suffered a physical change; rather, the company was simply not allowed to use its property due to the executive orders. Furthermore, the court ruled that even if Ocean Walk had pled facts supporting the finding of a covered “loss” or “damage,” the losses it claimed were excluded from coverage by the policies’ contamination exclusion. The court affirmed the lower court's dismissal of Ocean Walk’s complaint. View "AC Ocean Walk, LLC v. American Guarantee and Liability Insurance Company" on Justia Law