As we previously reported, on May 5, 2021, New York Governor Andrew Cuomo signed the Health and Essential Rights Act (the “HERO Act” or “Act”) into law, permanently codifying COVID-19-related health and safety protocols. In a memorandum issued with the signing, Governor Cuomo announced that he had secured an agreement with the Legislature for

In the wake of last week’s updated guidance from the Centers for Disease Control and Prevention (CDC) easing social distancing and mask requirements for fully vaccinated people, on May 19, 2021, New York State issued its own guidance that, effective immediately, mostly adopts those new recommendations. As of May 19, most New York employers may

During a May 10, 2021 press conference, Governor Andrew Cuomo announced his intention to propose legislation aimed at stopping discrimination against those who choose to get vaccinated against the COVID-19 virus. Unlike many states that are introducing legislation to prevent discrimination against those who are unvaccinated, this bill would protect those who are vaccinated

On May 3, 2021, New York Governor Andrew Cuomo and New Jersey Governor Phil Murphy announced a significant easing of COVID-19-related capacity restrictions on businesses in their respective states. Governor Ned Lamont of Connecticut, who joined the other two governors in the announcement, had previously ordered a comparable lifting of capacity restrictions in his state.

As we recently reported, as of March 12, 2021, all private employers in New York must provide their employees with up to four hours of paid leave to get each COVID-19 vaccination shot. The State has now released guidance on the new law (“Law”) in the form of Frequently Asked Questions (“FAQs”). Most importantly,

Proposed Paid Sick Leave Law Regulations

As we previously reported, New York State’s Paid Sick Leave Law (“PSLL”) went into effect on September 30, 2020. The PSLL requires all New York private employers to provide paid sick leave, which employees may begin using as of January 1, 2021. The amount of sick leave that

The first COVID-19 vaccines have started being shipped across the U.S. with the expectation that millions of doses will be administered over the next few weeks, with many times more over the coming months.  This is unequivocally good news and reason for optimism.  Meanwhile, however, the pandemic continues to spread nationwide and the numbers are

New York attorneys could soon have to complete cybersecurity training courses to satisfy their continuing legal education (“CLE”) requirement. The House of Delegates of the New York State Bar Association (“NYSBA”) has approved a report proposing that NYSBA’s Executive Committee recommend to the New York State Continuing Legal Education Board that the biennial CLE requirement

On August 6, 2020, in Rose’s 1 LLC, et al. v. Erie Insurance Exchange, a District of Columbia trial court granted an insurer’s cross motion for summary judgment on the issue of whether COVID-19 closure orders constitute a “direct physical loss” under a commercial property policy. Plaintiff insureds (“Insureds”) own several restaurants in Washington D.C. that were forced to close and suffered serious revenue losses stemming from the Mayor’s orders to close non-essential businesses and ordering people to stay home. As a result, the Insureds made claims to Defendant Erie Insurance Exchange (the “Insurer”) under their policies that included coverage for “loss of ‘income’ and/or ‘rental income’” sustained “due to partial or total ‘interruption of business’ resulting directly from ‘loss’ or damage” to the property insured. The policy also stated that it “insures against direct physical ‘loss.’”

Dictionary Definitions Open to Interpretation

As the Court framed the issue, “[a]t the most basic level, the parties dispute whether the closure of the restaurants due to Mayor Bowser’s orders constituted a ‘direct physical loss’ under the policy.” To support their argument, the Insureds relied on dictionary definitions of “direct” as “[w]ithout intervening persons, conditions, or agencies; immediate;” and “physical” as pertaining to things “[o]f or pertaining to matter, or the world as perceived by the senses; material as [opposed] to mental or spiritual.” The policy defined “loss,” as “direct and accidental loss of or damage to covered property.”

The Insureds relied on these definitions to make three arguments. First, they argued that the loss of use of their restaurant properties was “direct” because the closures were the direct result of the Mayor’s orders without intervening action. The Court rejected that argument because those orders commanded individuals and businesses to take certain actions and “[s[tanding alone and absent intervening actions by individuals and businesses, the orders did not affect any direct changes to the properties.”

Second, the Insureds argued that their losses were “physical” because the COVID-19 virus is “material” and “tangible,” and because the harm they experienced was caused by the Mayor’s orders rather than diners being afraid to eat out. The Court also rejected that argument because the Insureds offered no evidence that COVID-19 was actually present on their properties at the time they were forced to close and the mayor’s orders did not impact the tangible structure of the properties.

Third, the Insureds argued that the policy’s definition of “loss” as encompassing either “loss” or “damage,” required the insurer to “treat the term ‘loss’ as distinct from ‘damage,’ which connotes physical damage to the property,” and thus “loss” incorporates “loss of use.” The Court rejected that argument and held that the words “direct” and “physical” modify the word “loss” and therefore any “loss of use” must be “caused, without the intervention of other persons or conditions, by something pertaining to matter—in other words, a direct physical intrusion [onto] the insured property.” The Court held that the Mayor’s orders did not constitute such a direct physical intrusion.
Continue Reading D.C. Judge Rules COVID-19 Closure Orders Do Not Constitute “Direct Physical Loss”