U.S. District Judge Jed Rakoff ruled that Northwell can’t collect $1.25 billion in coverage under commercial property insurance plans it purchased from Lexington Insurance Co. and Interstate Fire & Casualty Co. because the health system could not show that its properties suffered direct physical loss or damage, according to Law360.
“Northwell fails to state a claim for breach of contract to provide interruption by communicable disease coverage because Northwell does not plausibly allege that state and local orders regulating the spread of COVID-19 declared uninhabitable and prohibited access to Northwell facilities,” Mr. Rakoff wrote in a memorandum order.
The judge dismissed the lawsuit with prejudice.
Northwell filed the lawsuit in February after the insurers told the health system that its claim for reimbursement of COVID-19-related costs and losses were not covered under the policies.
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