AMY'S KITCHEN, INC., Plaintiff and Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, Defendant and Respondent., 83 Cal. App. 5th 1062

Summary

HOLDINGS: [1]-The only plausible interpretation of the communicable disease extension in an insurance policy was that the need to clean or disinfect infected or potentially infected covered property constituted "direct physical loss or damage" of that property within the meaning of the policy. The trial court erred in holding otherwise. The trial court also incorrectly rejected the insured's claim under the loss avoidance or mitigation coverage extension on the same basis; [2]-Because the communicable disease extension applied only if a public health authority ordered decontamination due to the outbreak of a communicable disease at such location, the insured's pleading did not adequately allege a basis for coverage. Thus, the trial court properly sustained the insurer's demurrer on this ground, but it erred in denying leave to amend.