Louisiana Supreme Court Rules No Coverage for Covid-19 Business Interruption Claims in Cajun Conti
By Melinda S. Kollross
The Louisiana Supreme Court issued its decision in Cajun Conti LLC v. Certain Underwriters at Lloyds London becoming the latest state high court to rule in favor of insurers, holding that commercial property polices do not provide coverage for pandemic related economic losses in the absence of actual physical loss or damage to insured property.
Cajun Conti makes these important points which will be useful in future yet to be decided cases:
–Expert testimony proffered by the insured that COVID-19 damages insured property was contradicted by the fact that the insured could clean its property with disinfectants and thus was able to continue using the same property.
–The fact that the insured property can be cleaned and sanitized with disinfectants indisputably showed that the insured property was never damaged but remained physically intact and functional.
–The insured argument that direct physical loss encompasses the inability to use covered property would render the modifier “physical” before “loss” superfluous and contrary to settled rules of contract construction. The fact of the matter is that even when in-door dining was prohibited, the insured was able to still maintain a carry out/delivery business again showing indisputably that its insured property was neither lost nor changed.
–All policy terms were clear and unambiguous.
–The lack of a virus exclusion was irrelevant because there was no coverage in the first instance under the four corners of the policy.
–Numerous state supreme courts have reached a similar result when analyzing comparable policy language.
–While the insureds had the sympathy of the Court, the policy had to be enforced as written.