Insurance company attorneys sometimes make arguments trying to win their cases which does not square with insurance practices and evidence found in insurance reference materials. If you think about it, how many property insurance lawyers were ever trained as insurance adjusters or took the time to learn how insurance companies work?
The answer is “not many.” To overcome this lack of specialized knowledge and to be able to track down source materials to help better understand insurance, the insurance claims handling methods and processes and give us better chances at winning our cases for our clients and winning big, we hired what many call an insurance law librarian, Ruck DeMinico, over 12 years ago.
Ruck will go to any length to find source insurance materials at specialized insurance libraries. He maintains brief and issue specific information over years so we do not have to reinvent the wheel the next time an issue comes up that needs research. He also collects briefs from other cases and lawyers so we can learn arguments that have proven successful and avoid losing arguments.
An example is his calling and obtaining the Amicus brief in the recent North Carolina case finding that the business interruption loss is covered. That brief noted the following:
Covid-19 is neither ghostly nor intangible – it is real, and it is physical – and tragically, ubiquitous, and constantly shifting. Plaintiffs’ business interruptions were caused by the loss of use and access to their business premises from the virus and the Government Orders. Those orders in particular are indisputably a ‘physical loss’ event. Patrons cannot venture inside the restaurant premises because they are physically dangerous and they have been forbidden to do so. The risk of individuals falling victim to Covid-19 while congregating is so high that North Carolina authorities entered Government Orders effectively shutting down non-essential business premises. Defendant The Cincinnati Insurance Company (‘Cincinnati’) simply ignores the core reality: as a direct result of the virus and the Government Orders (a physical trigger), Plaintiffs have lost the physical use of their restaurants, resulting in a significant loss of business income as well as additional expense.
This brief highlighted my argument that if the odor of cat urine is physical damage, Covid 19 is physical damage and can create physical loss:
Further, there is also a long line of majority-rule cases holding that a property affected by an odor alone has experienced “physical loss” sufficient to trigger insurance even without physical alteration or damage to the property itself. For example, in TRAVCO Insurance Co. v. Ward, 715 F. Supp. 2d 699, 709 (E.D. Va.2010), aff’d, 504 F. App’x 251 (4th Cir. 2013), the court found “direct physical loss” where a “home was rendered uninhabitable by the toxic gases” released by defective drywall, regardless of lasting physical damage to the property itself. In another case, Gregory Packaging, Inc. v. Travelers Property Casualty Co., No. 2:12-cv-04418, 2014 WL 6675934 (D.N.J. Nov. 25, 2014), the court held that an ammonia discharge inflicted direct physical loss or damage to a manufacturing plant because the ammonia physically rendered the facility temporarily unfit for occupancy despite a lack of any structural alteration. Here, the presence of Covid-19 – now purportedly airborne- creates an analogous physical loss at Plaintiffs’ restaurants.
Ruck DeMinico will be my guest this afternoon at Tuesday at 2 With Chip Merlin. We will discuss what a good insurance reference library should contain and make suggestions for on-line materials public adjusters can use in their practice. Here is the link for this afternoon’s session.