When they purchased a popular multi-resort ski pass for the 2019/2020 ski season, a number of skiers also stipulated a Ski Pass Preserver insurance policy. Such a policy provided coverage for “Season Pass interruption”, expressly stating that policyholders would have been reimbursed if, inter alia, they were “quarantined”.

After state and local governments started issuing COVID-related stay-at-home orders, a group of insured skiers sought reimbursement for the loss of their ski pass benefits. They alleged that the stay-at-home orders and ensuing ski resort closures were quarantines that prevented them from using their season pass for the rest of the ski season. Since the insurer denied their claims, policyholders filed suit alleging that the former had broken the insurance contract and was in bad faith in refusing reimbursement.

By judgment of 27 February 2023, the Court of Appeal for the Eight Circuit affirmed the first instance decision dismissing plaintiff’s claims. The Court acknowledged that the policy failed to define the term “quarantined” and the surrounding terms. However, the Court held that such a term was unambiguous. It noted that “quarantined" appears in the policy alongside “hijacked”, “required to serve on a jury,” and “served with a court order to appear as a witness.” An individual who is subject to any one of these conditions is obligated or forced to remain in a specific location. “Quarantined,” read together with the surrounding conditions, implies a restriction akin to compulsory or compelled isolation”. That being so, the plaintiff’s contention that the term “quarantine” was to be construed as a broadly imposed restraint such as that deriving from stay-at-home orders did not stand. “The ordinary person at the time the Ski Pass Preserver policy was purchased would have understood “quarantined” to mean the compulsory isolation of the insured”, the Court held. Since this was not the plaintiff’s situation (plaintiff had failed to allege as a factual matter that they were forced to isolate themselves from others), the Court found that their claim had to be dismissed.

Reference: Rossi et al. v. Arch Insurance Company et al., Court of Appeal for the Eight Circuit, 27 February 2023.

Full text of the decision available at en