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In the case of APX Operating Co. LLC v. HDI Global Insurance Co., case number N21C-03-058, in the Superior Court of the State of Delaware, The Court rejected the lawsuit from a multi-state water park company that appealed from an order dismissing their COVID-19 coverage suit.

This case is among many wherein the state’s appellate courts have sided with the insurance company. The Delaware Supreme Court adopted the rationale of Judge Abigail M. LeGrow when she made her order to dismiss the suit by APX Operating Co. LLC, filed in November 2021. A three-judge panel issued a one-page ruling affirming the lower court’s decision, stating in pertinent part, that “The judgment of the Superior Court is affirmed,” Chief Justice Collins J. Seitz Jr. wrote on October 5, 2022.

In dismissing the Water Park’s claims, Judge LeGrow determined that an exclusion for “contamination” clearly invokes the exclusion of coverage clause. The Water Park company acquired the claims when it purchased the assets as part of a bankruptcy involving Apex Parks Group in 2020, after Apex filed for Chapter 11 protection having $100 million in debts. The bankruptcy was filed after the park suffered COVID-19-related park shutdowns in the States of California, Florida, and New Jersey, with APX ultimately filing a suit for what it called “acquired insurance rights.”

HDI Global Insurance Co. denied APX’s claim for covid 19 related coverage and argued in court that even if the virus were found at APX’s water parks, it would not cause “direct physical loss or damage.” HDI also argued that under the policy, a loss of use did not qualify APX for coverage. In her ruling, Judge LeGrow did not address the issue of whether or not there was “physical loss or damage” in her dismissal order, instead, Judge LeGrow found that the contamination exclusion undoubtedly bars coverage, because the policy’s definitions of contamination includes “virus,” among other substances, according to the judge’s ruling.

APX tried to argue that the contamination exclusion refers to “traditional environmental pollution or contamination,” but judge LeGrow disagreed, instead finding that there was no clear limitation in the policy. In September, APX made oral argument that HDI’s interpretation of the policy exclusion clause was overly broad and ambiguous, while the HDI successfully argued that the policy did not suggest that COVID-19 is not among those that are excluded environmental pollutant viruses from coverage.

This decision is among many in State’s like Washington, Oklahoma, Massachusetts, Iowa, Wisconsin, and South Carolina which recently sided with insurance companies involving COVID-19 coverage court battles. Most litigants are learning the hard way, that losses from covid-shutdown orders are not covered. The Wisconsin, South Carolina, and Massachusetts justices went a step further by ruling that businesses did not have coverage for losses that were caused by the presence of the coronavirus at their establishments.