Property insurance policies are contracts entered into between an insurance company and an insured party. These contracts are usually drafted by the insurance company, and often contain provisions that appear innocuous but are included to benefit the insurance company at the expense of their client. The tremendous economic damage caused by the Covid-19 pandemic has resulted in a nationwide deluge of insurance claims, filed by property owners attempting to recoup some of the pandemic-related losses. When an insurance company denies a Covid-19 related claim, the client may pursue a civil claim against the company to enforce the insurance policy. A Superior court in Providence, Rhode Island recently heard a real estate company’s claim against their insurance company.
According to the facts discussed in the recent ruling, the plaintiff in the recently decided case is one of the largest privately-held real estate investment companies in the world. The plaintiff’s business includes the leasing of residential, commercial, and industrial properties in Rhode Island. The plaintiff entered into an insurance contract with the defendant to cover several properties they owned in Rhode Island. After the arrival of the Covid-19 pandemic, the plaintiff was unable to keep many of their properties occupied and lost a substantial amount of income as a result.
Based on their losses, the plaintiff made a claim with the defendant, demanding that the defendant honor the insurance contract because the “physical damage” done by the SARS-COV-19 virus was what resulted in their loss. The defendant denied the plaintiff’s claim, noting exclusions in the plaintiff’s policy that limited the covered losses resulting from communicable diseases or contamination. After the defendant rejected their claim, the plaintiff filed a suit in Rhode Island state court.