Eye Clinic’s Bad Faith Claim Proceeds in COVID-19 Coverage Action

ALBUQUERQUE, N.M. — A New Mexico federal judge has refused to dismiss an eye surgery clinic’s bad faith claims in a COVID-19 coverage action, ruling that it plausibly alleged Transportation Insurance Co. did not fairly investigate its claim.

In an Oct. 12 order, Judge Kea W. Riggs explained that Albuquerque Ambulatory Eye Surgery Center LLC’s claim “is not entirely foreclosed even in the absence of coverage under the policy.” The judge also allowed the plaintiff to amend its complaint to plausibly allege “direct physical loss” of covered property.

“In sum, allegations of ‘loss of use’ or ‘loss of the essential …