Media Coverage
Source: Law360
Media Coverage
12.11.14
A recent New Jersey federal court ruling may have broad repercussions for property insurance providers and policyholders. U.S. District Judge William H. Walls found in favor of food packaging manufacturer Gregory Packing Inc., which sued Travelers Property Casualty Co. of America over coverage for damages caused by the release of ammonia gas into a Georgia plant in 2010.
The judge determined that the “physical loss of or damage” language in Gregory Packaging’s property insurance policy should cover losses caused by the plant’s temporary shutdown and days-long cleanup effort as a result of the ammonia release. The decision effectively rejected Travelers’ interpretation of the policy, which would require “a physical change or alteration to insured property requiring its repair or replacement” in order to provide coverage.
Insurance Recovery & Advisory partner Joseph Jean told Law360 the ruling could impact future property insurance disputes in favor of policyholders.
"One of the driving factors—one of the things companies buy insurance for—is coverage for the loss of use of the property and the costs to restore their operations,” he said. “Whatever the situation may be, if you have, as in Gregory Packaging, a condition that develops accidentally or from an unforeseen event that impacts covered property and interrupts the policyholder’s business, this opinion should help to establish direct physical loss or damage and coverage."