Hunton Insurance Recovery Blog

The Fourth Circuit recently held that a “literal” interpretation of a North Carolina insurance law was “poppycock.” Whitmire v. S. Farm Bureau Life Ins. Co., No. 21-1643 (4th Cir. 2022). The case involved a North Carolina statute that required an insurer to provide notice by mail addressed to the insured’s “last known post-office address in this State.” The person that was to receive notice under the statute had lived in North Carolina but then moved to South Carolina. The insurer provided notice at the person’s South Carolina address. It did not provide notice at the person’s last known address in North Carolina. So the beneficiary of the life insurance argued that notice did not meet the North Carolina statute because it was not provided at “last known post-office address in this State,” i.e. North Carolina.

In a resounding victory for policyholders, a North Carolina court ruled that “all-risk” property insurance policies cover the business-interruption losses suffered by 16 restaurants during the COVID-19 pandemic.  North State Deli, LLC v. Cincinnati Ins. Co., No. 20-CVS-02569 (N.C. Sup. Ct., Cty. of Durham, Oct. 7, 2020).  This is the first judgment in the country to find that policyholders are, in fact, entitled to coverage for losses of business income resulting from the COVID-19 pandemic.  Equally important, the decision illustrates that a proper analysis of the operative policy provisions requires this result.