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Business Interruption Insurance and the 'Cessation or Suspension' Rule
Commercial entities placing first-party insurance often seek to insure physical loss or damage to their property and the loss of earnings directly arising from that loss or damage. Insurance against such loss of earnings is typically addressed through a 'Business Interruption' provision that is intended, as some courts have said, ”to do for the business what the business would have done for itself had no loss occurred” to the insured's property. Protection Mutual Ins. Co. v. Mitsubishi Silicon Am. Corp., 992 P.2d 479, 481 (Or. Ct. App. 1999) (quoting A&S Corp. v. Centennial Ins. Corp., 242 F. Supp. 584, 589 (N.D. Ill. 1965). While insurance policy wording can vary, see Protection Mutual, 992 P.2d at 481, broker manuscript and insurer forms require that an insured peril cause physical loss or damage to insured property, creating a 'necessary interruption' or 'necessary suspension' of the business. Some claimants and commentators argue that this insurance applies to any downturn or slowdown in business following loss or damage, but it is well-settled in case law that there must be a complete cessation or suspension in order to qualify for business interruption coverage.
The Settled Rule
The 'vast majority' of courts that have considered the issue have concluded that only a 'complete cessation' of business is sufficient to trigger business interruption coverage. See Home Indem. Co. v. Hyplains Beef, 893 F. Supp. 987, 991'92 (D. Kan. 1995); see also, e.g., Madison Maidens, Inc. v. American Mfgs. Mut. Ins. Co., No. 05 Civ. 4584 LTS JCF, 2006 WL 1650689, at *3'4 (S.D.N.Y. June 15, 2006); American States Ins. Co. v. Creative Walking, Inc., 16 F. Supp. 2d 1062, 1065 (E.D. Mo. 1998); Apartment Movers of Am., Inc. v. OneBeacon Lloyd's of Tex., No. Civ.A.3:04-CV-0278-B, 2005 WL 106477, at *1 (N.D. Tex. Jan. 19, 2005) ('necessary suspension' language). Many court decisions addressing this issue in the context of alleged business downturns following the terrorist attack of 9/11 have affirmed and applied this settled rule. See, e.g., Wyndham Int'l Inc. v. Ace Am. Ins. Co., No. 02-07779-A, slip op. (Tex. Dist. Ct., Oct. 13, 2006), aff'd on other grounds, 186 S.W.2d 682 (Tex. Ct. App. 20006); 54th Street Ltd. Part-ners, L.P. v. Fidelity & Guar. Ins. Co., 763 N.Y.S.2d 243 (App. Div. 2003).
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?