The ruling cited two key precedents:
- Rhonda Wilson v. USA Insurance Co. (Third Circuit): Held that neither the virus nor government-mandated shutdown orders constituted physical loss or damage.
- AC Ocean Walk LLC v. American Guarantee and Liability Insurance Co. (New Jersey Supreme Court): Found that a property must be physically destroyed or altered to qualify for coverage, denying pandemic claims from an Atlantic City casino.
Judge Williams emphasized that the AC Ocean Walk ruling involved the same policy language as Burlington’s, effectively resolving the issue under New Jersey law.
Background and Implications
Burlington filed its lawsuit in May 2021, claiming Zurich ignored its requests for coverage of pandemic-related losses. Zurich moved the case to federal court and sought dismissal, arguing courts consistently reject claims that the virus causes direct physical loss or damage.
The dismissal eliminates Burlington’s ability to pursue additional claims on this issue. It reinforces the legal consensus that pandemic-related shutdowns do not meet the standard for property insurance coverage.
