In a rare recent decision in favor of the policyholder, Urogynecology Specialist of Florida, LLC v. Sentinel Insurance Company, Ltd., M.D. Florida Case No. 6:20-cv-1174, the U.S. District Court in Orlando refused to dismiss a business interruption coverage case against Sentinel Insurance Company stemming from the Coronavirus pandemic. Instead of offering a reasoned legal opinion in favor of coverage, however, the court relied heavily upon the novelty of the factual issues and the settled principle requiring that any ambiguity in an insurance policy be construed against the insurer.
Sentinel issued Plaintiff an all-risk policy to cover its gynecology practice. After being forced to close its doors during March 2020, Plaintiff sought coverage for loss of use of the insured property, loss of business income and loss of accounts receivable. Sentinel denied coverage, and Plaintiff filed suit. Sentinel moved to dismiss, arguing coverage was precluded by the virus exclusion in the policy.
Although the insurer relied upon several cases which upheld similar virus exclusions, the court refused to equate the facts surrounding the pandemic with situations involving pollution, mold or sexually transmitted viruses. The court noted the absence of any binding case law on the issue of the effects of COVID-19 on insurance contract virus exclusions. According to the court, “[d]enying coverage for losses stemming from COVID-19 does not logically align with the grouping of the virus exclusion with other pollutants such that the Policy necessarily anticipated and intended to deny coverage for these kinds of business losses.” As a result, the court refused to dismiss the action, holding that “several arguably ambiguous aspects of the Policy make determination of coverage inappropriate at this stage.”