Appeals court reverses retailer’s coverage win for losses during riots

The 2nd U.S. Circuit Court of Appeals Monday reversed a leather goods retailer’s coverage win for losses resulting from riots in New York after the death of George Floyd, ruling an ocean marine cargo policy issued by a unit of The Hartford Insurance Group Inc. is ambiguous.

In Navigators Insurance Co. v. Goyard Inc., the three-judge panel said the policy does not clearly state whether the strike, riot and civil commotion provision applies only to goods in transit or also covers retail losses. The panel ruled that the trial judge should consider evidence outside of the policy to determine how the coverage applies.

Goyard filed a claim with Navigators on June 2, 2020, saying it sustained $684,855 in losses at its Manhattan retail store from the riots.

Navigators denied the claim, explaining that its policy covered some losses but not retail storage losses caused by riots and civil commotion. The insurer sued Goyard in federal court in New York in August 2020, seeking a court order saying it had no coverage obligations, court records show.

Goyard filed counterclaims for breach of contract and bad faith and sought recovery of attorneys fees and punitive damages. The parties filed competing motions for summary judgment.

U.S. District Judge Alvin K. Hellerstein of the Southern District of New York agreed with Goyard that the retail losses were covered by the SR&CC provision and also sustained Navigator’s motion seeking summary judgment on the retailer’s requests for attorney fees and punitive damages.

Representatives for the parties did not respond to requests for comment.