New Hampshire Court Finds COVID-19 Caused Covered Physical Loss Under Hotel Insurance Policies

By RJ Proie, Taylor DeVore & Padgett PC 

A New Hampshire court granted partial summary judgment to plaintiffs, owners of 23 hotels in New Hampshire, Massachusetts and New Jersey, holding that business interruption losses are covered under policies requiring “direct physical loss or damage.” The court relied on a New Hampshire Supreme Court ruling that held that the odor of cat urine was sufficient to trigger coverage under a similar policy.  The court held that property that has been contaminated with COVID-19 is distinct from uncontaminated property.

The court denied summary judgment for seven insurers based on a microorganism exclusion, but granted partial summary judgment to one insurer whose policy included a pollutants and contaminants exclusion. The case is Schleicher & Stebbins Hotels, LLC et al. v. Starr Surplus Lines Insurance Companies, et al., in Merrimack County Superior Court, Cause No. 217-2020-CV-00309.

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