Federal Court In Louisiana Finds Evacuation Order Issued In Advance Of Hurricane Satisfies Civil Authority Requirement That The Civil Authority Action Result From Property Damage

A federal court in Louisiana found that an evacuation order issued prior to hurricane landfall satisfied the requirement of a policy’s civil authority provision that the action of the civil authority result from property damage because the evacuation order was issued in anticipation of damage, which did occur. Pathology Lab. Inc. v. Mt Hawley Ins. Co., No. 2:21-CV-01558, 2021 U.S. Dist. LEXIS 145129 (W.D. La. Aug. 3, 2021).

The insured’s business was subject to an evacuation order issued by the local government in anticipation of property damage from a hurricane that made landfall two days later, causing significant damage. The insured sued its insurer to recover business income loss sustained as a result of the evacuation order, and, on a motion to dismiss, the insurer argued that the evacuation order did not trigger coverage because it was issued in anticipation of and not as a result of property damage as required by the civil authority provision. The court found that the evacuation order did not trigger the civil authority provision upon its issuance on August 25, 2020, but that the property damage to Lake Charles on August 27, 2020, did trigger the provision because the evacuation order, which was mandatory and continuing, was issued in anticipation of property damage, which did occur.