botanical garden

On 14 June 2022, the Supreme Court of New York upheld a lower court decision and ruled that New York Botanical Garden – a non-profit organization which conducts research and education about plant science – is entitled to coverage under a Pollution Legal Liability policy for "contingent business interruption" loss – which it had stipulated with Allied World Assurance Company (U.S.) Inc. – on account of governmental orders shutting down its operations in response to COVID-19.

While the general trend of both State and Federal Court is to dismiss policyholder claims for COVID-19-related business interruption losses (in this respect, see news published on 1 April 2022), the circumstances of the present case led the State Courts to conclude otherwise. Notably, under the policy, "contingent business interruption" was defined as "the necessary suspension of your business operations at a location owned or leased to you as a result of an order by a government body or authority denying access to the location”. In other words – unlike the vast majority of business interruption policies – the policy in question did not require physical loss or damage to property to trigger coverage. Accordingly, the State Courts exceptionally ruled in favor of the policyholder.

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