“Mere inability to use a room thus does not amount to direct physical loss of the room. Moreover, the policy expressly excludes ‘[l]oss or damage arising from loss of use.’ This exclusion straightforwardly applies to bar the loss of use claim asserted by AMAG here,” wrote U.S. District Judge Myong J. Joun of the District of Massachusetts.
A federal judge in Massachusetts denied a pharmaceutical manufacturer’s request for business interruption coverage after an air leak at the plant caused a $30 million loss of a Pfizer drug due to mold exposure, finding the alleged losses weren’t covered by “direct physical loss of or damage to property.”
U.S. District Judge Myong J. Joun of the District of Massachusetts granted the motion for summary judgment by the insurer, American Guarantee and Liability Insurance Co., in an Aug. 16 opinion, concluding the loose bolt that caused an air leak and subsequent contamination to AMAG Pharmaceuticals’ production of a Pfizer drug didn’t constitute direct physical loss or damage of property under the parties’ insurance policy. The case is captioned AMAG Pharmaceuticals v. American Guarantee and Liability Insurance.
