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AFM moved for judgment on the pleadings, arguing that the government order closing Mohawk Gaming did not trigger the civil authority provision of the policy. The district court agreed. In granting the insurer’s motion, however, the court made two errors. (Credit: Chansom Pantip/Shutterstock) AFM moved for judgment on the pleadings, arguing that the government order closing Mohawk Gaming did not trigger the civil authority provision of the policy. The district court agreed. In granting the insurer’s motion, however, the court made two errors. (Credit: Chansom Pantip/Shutterstock)

Affiliated Factory Mutual Insurance Co. (AFM) was recently awarded judgment in a COVID-19-related business interruption claim heard before the Northern District of New York. In doing so, the court followed in the footsteps of other federal courts across the country when it failed to consider all parts of the policy as required by state law and made fact determinations at the Rule 12(c) pleading stage.

Mohawk Gaming Enterprises, a casino and resort operated by the Saint Regis Mohawk Tribe located on the border of New York and Canada, was forced to close its operations due to government orders. It filed a claim with AFM requesting coverage for business interruption under the civil authority section of the policy. AFM ignored the basis of Mohawk Gaming’s claim and instead acknowledged the claim as one for communicable disease coverage — a coverage with a low sublimit. Eventually, the insurer denied Mohawk Gaming’s claim, and Mohawk sued AFM seeking recovery of business income losses that it incurred when it was forced to close due to the COVID-19 pandemic.

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