Why New Jersey Companies Should Have Coverage for Third-Party Claims under Directors & Officers and Commercial General Liability Policies for Coronavirus Claims

The first coronavirus lawsuits have now been filed. Shareholders have filed suits against two companies, Princess Cruises and Inovio Pharmaceuticals, alleging misrepresentations in connection with the outbreak. Additionally, two passengers have sued Princess Cruises for its conduct with respect to the ill-fated Grand Princess cruise ship. Under New Jersey law, insurance coverage should exist for these types of claims — directors & officers (D&O) insurance for the shareholders suits, and commercial general liability insurance for the personal injury suits. Coverage for coronavirus claims under both policy types may hinge in large part on state law interpretations of the scope of the pollution exclusion.

D&O liability insurance policies apply to financial claims against directors and officers and certain other individuals and, in some
instances, the companies themselves. These policies typically do not apply to claims arising from bodily injury. Policyholders faced with coronavirus- based shareholder suits can expect their insurance companies will rely on such exclusions to deny coverage. New Jersey law dictates they will not be successful....