A restaurant that was temporarily closed by order of officials after Sandy has had its insurance claim rejected

Credit: PropertyCasualty360

On October 28, 2012, at approximately 3:00 p.m., the commissioner of the New Jersey Department of Environmental Protection (DEP) issued an order closing Liberty State Park in anticipation of Superstorm Sandy.

All buildings within the park were closed pursuant to the DEP’s order. In addition, police blocked access to the park.

Superstorm Sandy made landfall in New Jersey the following day, on October 29, and the park remained closed to the public until November 16, 2012.

Nova Casualty Company, the insurer for Maritime Park, LLC, the owner of the Maritime Parc restaurant in the park, paid Maritime for certain losses stemming from the closure.

Related: How to navigate a business income loss claim

Maritime also sought additional coverage from Nova for loss of business income under a “civil authority” provision set forth in the Nova insurance policy.

After Nova denied coverage under that provision, Maritime sued.

The trial court determined that Maritime was not entitled to coverage under the civil authority provision of its insurance policy, and Maritime appealed.

The appellate court affirmed.

In its decision, the appellate court explained that the Nova policy provided civil authority coverage when (1) a “covered cause” of loss caused damage; (2) the damage was to property at a location other than the insured location, but located within a mile of it; and (3) the action of a civil authority prohibited access to the property.

The appellate court reasoned that even if the DEP commissioner’s October 28, 2012 order closing the park in anticipation of Superstorm Sandy was deemed a cause of Maritime’s loss of business revenue, Maritime could not be paid under the civil authority provision unless the circumstances involved a “covered claim of loss.”

The case is Maritime Park, LLC v. Nova Casualty Co., No. A-3554-17T2 (N.J. App. Div. Super. Ct. March 29, 2019).

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