Hartford Fire Ins. Co. v. Moda, LLC

Citations

• 346 Conn. 64

Syllabus

The plaintiff insurance company sought a judgment declaring that it was not obligated to cover certain business losses suffered by the defendants, related companies that sell footwear to retailers throughout the country, during the COVID-19 pandemic. Prior to the pandemic, the defendants purchased two insurance policies from the plaintiff, a package policy that covered specified premises and business personal property, and a marine policy that covered the defendants' inventories while in transit and storage. The package policy specifically provided coverage for ''direct physical loss of or direct physical damage to . . . [c]overed [p]roperty'' caused by or resulting from a covered cause of loss. It also included a provision obligating the plaintiff to pay for the loss of business income incurred by the defendant from ''the necessary interruption of . . . business operations'' and an exclusion for loss or damage caused by the presence, growth, proliferation, or spread of a virus. The marine policy, which was controlled by New York law pursuant to its choice of law provision, likewise insured ''against all risks of direct physical loss or direct physical damage to'' insured property, subject to specific exclusions. As a result of various governmental orders temporarily clos- ing nonessential businesses at the beginning of the COVID-19 pandemic, the defendants' retail customers cancelled orders, causing the defen- dants' warehouses to overflow with inventories, which, due to the sea- sonal nature of the retail business, became effectively unsellable. After the plaintiff commenced the present action, the defendants filed a coun- terclaim, alleging, inter alia, breach of the package and marine policies and breach of the implied covenant of good faith and fair dealing. The plaintiff thereafter moved for summary judgment on the complaint and the counterclaim, arguing that neither the package policy nor the marine 346 Conn. 64 FEBRUARY, 2023 65 Hartford Fire Ins. Co. v. Mod