NJ Court's 'Direct Physical Loss' Ruling A Boon To Insureds

Law360, Los Angeles (December 11, 2014, 4:39 PM EST) -- A New Jersey federal judge recently ruled that an ammonia release at a factory constituted direct physical loss or damage under the owner's property insurance policy, a decision attorneys say could embolden more policyholders to challenge coverage denials for incidents that don't involve an actual physical change to property.

U.S. District Judge William H. Walls concluded that Newark, New Jersey-based juice cup manufacturer Gregory Packaging Inc. sustained "physical loss of or damage" to its plant in Georgia when ammonia gas was released into the facility in 2010, temporarily shutting it down and prompting cleanup efforts that lasted for several days....

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