In HT-Seattle Owner LLC v. Am. Guar. & Liab. Ins. Co., NO. 2:21-cv-00048-BJR, 2021 WL 2206480 (W.D. Wash. June 1, 2021), policyholders argued that coverages aside from those that had been litigated in Washington State potentially provided insurance coverage to COVID-related losses. The District Judge handling all these cases disagreed:
These provisions, however, all require direct physical loss or damage to covered property to trigger coverage. See Compl., Ex. A, Dkt. No. 1-1 at 41 (Insurance Agreement), 47 (Property Damage), 51(Time Element), 53 (Extra Expenses), 85 (Covered Cause of Loss). Therefore, given the Court's conclusion that COVID-19 does not cause physical loss or damage, these provisions fail to provide coverage.
HT-Seattle, 2021 WL 2206480, at *1 (citations omitted).
The Court pointed out that this case "is one amongst a multitude of cases across the United States in which a business seeks coverage for income lost due to the COVID-19 pandemic from their insurance company." HT-Seattle, 2021 WL 2206480, at *1. The Western District of Washington assigned all such insurance coverage cases to the District Judge who decided this case. She, in turn, "consolidated the earliest of these actions into ten cases." She reached the same ruling in all those cases because they all had the same policy language in their Insuring Agreements, i.e., in their coverage grants:
This Court recently published an Order in those cases holding there was no coverage for losses due to COVID-19. See Nguyen, et al. v. Travelers Cas. Ins. Co., et al., No. 20-cv-00597, 2021 WL 2184878 (W.D. Wash. May 28, 2021). The Court held that in all of the relevant policies “direct physical loss of or damage to” covered property was required to trigger coverage and COVID-19 did not cause physical loss or damage. Id. at *9–*13. Additionally, the Court held that the plaintiffs’ Extra-Contractual Claims should be dismissed along with their Contractual Claims where they failed to identify independent grounds apart from unreasonable denial of coverage. Id. at *13–*14.
HT-Seattle, 2021 WL 2206480, at *1 (footnote omitted).
Once again, the Court also ruled that because there was no viable coverage claim, there was no cognizable claim for insurer bad faith, either. HT-Seattle, 2021 WL 2206480, at *2.
Cases involving the dismissal of bad faith claims in COVID coverage cases after a holding that there is no coverage for COVID-related losses, are reviewed in Volume 2 of Dennis J. Wall, Litigation and Prevention of Insurer Bad Faith § 9:14 (3d ed. Thomson Reuters West, 2021 Supplements forthcoming). See in addition 2 id. § 9:31 (discussing basic coverage issues common to Chinese Drywall, COVID, and other property insurance cases).
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