As COVID-19 litigation has progressed across the country regarding insurance coverage for business interruption, insurers have cited an array of so-called “virus exclusions” to avoid their contractual obligations. Simply stated, insurers have made an industrywide practice of discouraging and combating lawsuits by relying on any exclusion that has the word “virus” in it. The law in many jurisdictions, including Florida, provides that an exclusion only applies when it is clearly and unambiguously intended to bar coverage for the risk in question. But if this is true, is it appropriate for carriers to avoid coverage by citing exclusions drafted decades ago to address things like industrial pollution and fungus? One Florida court has now answered this question in favor of policyholders.

Urogynecology Specialist of Florida v. Sentinel Insurance, involved a medical office that was forced to temporarily close its doors due to the pandemic and civil authority orders. After the practice notified Sentinel of its business interruption losses, the insurer denied coverage because its policy purportedly excluded losses caused by a virus. In its motion to dismiss the policyholder’s ensuing lawsuit in the Middle District of Florida, Sentinel argued that any COVID-19 losses were unambiguously excluded by its “Limited Fungi, Bacteria or Virus Coverage.” This provision barred coverage for the “[p]resence, growth, proliferation, spread or any activity of fungi, wet rot, dry rot, bacteria or virus.” The insured, in contrast, argued that an ambiguity in the insurance policy required the court to construe its terms in favor of coverage.

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