Federal Decide Asks State Courtroom to Weigh in on COVID-19 Enterprise Interruption Case

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A large majority of courts nationwide have sided with insurers in the recent string of pandemic-driven business interruption cases. Nevertheless, a federal judge has asked the Maryland Court of Appeals to weigh in on whether the COVID-19 virus causes “physical loss or damage” to a property such that it triggers coverage.

Claiming the physical presence of COVID-19 in its stores, Tapestry, owner of luxury accessory brands like Coach, Kate Spade New York, and Stuart Weitzman, sued its insurance provider, Factory Mutual Insurance Co., for lost profits due to employees’ exposure to coronavirus.  Managing 414 stores in the United States, with 15 in Maryland alone, Tapestry alleged that 1,676 workers had contracted the virus when they submitted their first complaint.

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