Joshua M. Bowman quoted in Massachusetts Lawyers Weekly on Superior Court ruling that commercial insurance policy doesn’t cover restaurants’ COVID-19-related losses

January 27, 2021

Joshua M. Bowman, chair of the firm’s Hospitality Practice Group, was quoted in Massachusetts Lawyers Weekly (MLW) on January 21, 2020. The article, “Commercial policy doesn’t cover restaurants’ COVID losses,” details a Superior Court ruling that income losses incurred by restaurants as a result of COVID-19-related stay-at-home orders are not covered by the commercial property insurance policy in question in Verveine Corp., et al. v. Strathmore Insurance Company, et al.

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From the article:

“Meanwhile, Joshua M. Bowman, a Boston business lawyer who represents restaurants and hotels, said he thought the case was wrongly decided.

‘The central issue was the ‘direct physical loss or damage’ provision in the policy,’ he said. ‘I think the provision was ambiguous, and, under Massachusetts law, the court should have resolved the ambiguity to the policyholder’s benefit.’

By not doing so, Bowman continued, the court failed to follow Massachusetts’ rulings in other cases in which judges found that hazardous fumes that did not actually damage the physical structure of a building still constituted coverable ‘physical loss.’

‘A major failing on the plaintiffs’ side in this case was that they didn’t even allege there was COVID in their restaurants or that anyone was made sick from it,’ he said. ‘There are other cases pending where it was alleged that people who worked in a restaurant or visited were made sick by COVID. Hopefully those cases will not face the same result.’

Bowman added that courts elsewhere have found coverage in cases like Verveine.

‘A case in North Carolina had the exact same issues and almost identical facts and concluded that those restaurants’ losses constituted a direct physical loss as covered by the policy,’ he said.”