Steve Raptis in Law360: Coronavirus 'Civil Authority' Coverage May Hinge on Science


Haynes and Boone, LLP Partner Steve Raptis talked with Law360 about lawsuits over “civil authority” insurance coverage, which may center around how long the COVID-19 virus can linger in establishments like restaurants.

Here is an excerpt:

Oceana Grill, which is in New Orleans' French Quarter, argued in its Monday complaint that the civil authority prong of its "all risk" property policy with underwriters at Lloyd's of London should cover its lost revenue following statewide orders that sharply curtailed the size of public gatherings and required restaurants to cease on-site dining.

Like many civil authority provisions, the one in Oceana Grill's policy requires that a government restriction stem from a "direct physical loss" — or damage — to a nearby property for coverage to apply. …An attorney for the restaurant told Law360 that this requirement is met by the COVID-19 pandemic. He noted that Louisiana's governor and New Orleans' mayor supported their restrictions by pointing to concerns of the coronavirus contaminating, and thereby damaging, public spaces.

According to Haynes and Boone, LLP Partner Stephen Raptis, even if an expert determines the coronavirus has a fairly short lifespan on a surface, "there is always the risk of re-contamination," which he said could fulfill the direct physical loss requirement.

"I would argue that this is a continually renewing physical loss, as long as individuals are continuing to come through a property," said Raptis, who represents policyholders. "These civil authority orders are intended to prevent re-contamination."

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