2023-2024 INSURANCE LAW DEVELOPMENTS

Written by Emily Cuatto and Justin Wong^*

The following published decisions from the California Supreme Court, California Courts of Appeal, and Ninth Circuit may be of interest to California insurance law practitioners.

PROPERTY DAMAGE & COVID-19

In a duet of long-awaited decisions, the California Supreme Court addressed insurance coverage for business interruption due to the COVID-19 pandemic. Joining the vast majority of state and federal courts, in Another Planet Entertainment, LLC v. Vigilant Insurance Co., 15 Cal. 5th 1106 (2024), the California Supreme Court held that the presence of the COVID-19 virus on business property generally does not trigger coverage for business losses suffered during the pandemic under a commercial property insurance policy. Under California law, to trigger coverage for business losses due to COVID-19, an insured must demonstrate a distinct, demonstrable, physical alteration to the property. The alteration does not need to be visible to the naked eye but must result in some injury or impairment to the property. As the insured’s allegations focused on COVID-19’s risk to humans and its impact on the properties’ intended use rather than direct physical alterations to its premises, it failed to sufficiently plead a basis for triggering coverage.