A second federal judge in New Jersey has rejected a dealership's effort to hold an insurer liable for business interruption losses incurred because of a 2020 state-ordered shutdown related to the COVID-19 pandemic.
U.S. District Judge Brian Martinotti dismissed a suit by Downs Ford in Toms River, N.J., because the store's commercial policy from Zurich American Insurance Co. excludes losses caused by a virus.
In a March 25 decision, Martinotti said the pandemic, not Gov. Phil Murphy's executive order that closed nonessential brick-and-mortar retailers, was responsible for Downs Ford's losses. He ruled that the exclusion is unambiguous and does not violate public policy.
In February, U.S. District Judge Freda Wolfson dismissed a similar suit against Zurich American Insurance by Causeway Automotive, a dealership group in Manahawkin, N.J.
Dealership lawyer Gary Ahladianakis, of Toms River, who represents both Downs Ford and Causeway, called it "imperative" for the state Legislature to pass a law requiring "every insurance policy that provides coverage for the loss of use of property and business interruption to be construed to include coverage for business interruption due to the COVID-19 pandemic."