John's Grill, Inc. v. The Hartford Financial Services Group, Inc.

Opinion of the Court by Guerrero, C. J.

Plaintiffs John’s Grill, Inc., and John Konstin (together, John’s Grill) operate a restaurant in San Francisco. Like many businesses, John’s Grill suffered substantial financial losses during the COVID-19 pandemic. John’s Grill sought compensation for its losses from its property insurer, Sentinel Insurance Company, Ltd. (Sentinel). Sentinel denied coverage on various grounds, including that the loss or damage claimed by John’s Grill did not fall within the insurance policy’s “Limited Fungi, Bacteria or Virus Coverage” endorsement. The Limited Fungi, Bacteria or Virus Coverage endorsement generally excludes coverage for any virus-related loss or damage that the policy would otherwise provide, but it extends coverage for virus- related loss or damage if the virus was the result of certain specified causes of loss, including windstorms, water damage, vandalism, and explosion. The validity of this specified cause of loss limitation is the focus of the parties’ dispute. John’s Grill acknowledges it cannot meet this limitation, but it contends the limitation is unenforceable because it renders the policy’s promise of virus- related…