Owners of a San Francisco restaurant had no reason to expect their insurance to pay for pandemic-related losses even though their policy included coverage for virus-caused damages, California's Supreme Court unanimously held Thursday.
Related: Lessons learned from adjusting long COVID insurance claims
In a 27-page opinion, the court said John's Grill's property insurance, specifically its "limited fungi, bacteria or virus coverage," only offered payouts for virus contamination caused by a small set of circumstances, including fire or a windstorm. That coverage by Sentinel Insurance Co. did not extend to economic losses caused by the eatery's government-ordered COVID-19 closure, the court concluded.
"The policy's limitations on coverage were explicit and unambiguous," Chief Justice Patricia Guerrero wrote. "Absent some extraordinary circumstance, courts must enforce such explicit and unambiguous policy limitations. John's Grill has not shown any such extraordinary circumstances exist here."
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Cheryl Miller
Cheryl Miller, based in Sacramento, covers the state legislature and emerging industries, including autonomous vehicles and marijuana. She authors the weekly cannabis newsletter Higher Law. Contact her at [email protected]. On Twitter: @CapitalAccounts
