The California appeals court has ruled that a burglary at a marijuana dispensary in June 2020 was considered one occurrence under its insurance policy. However, the trial judge made a mistake by determining that the insurer did not have to make an additional payment for business losses. In the case of Apex Solutions Inc. v. Falls Lake Insurance Management Company Inc., the court stated that there was a narrow issue regarding the calculation of Apex’s lost business income.
During the civil unrest following George Floyd’s death, Apex’s store in Oakland was burglarized in June 2020. The policies from Falls Lake provided $600,000 in coverage per occurrence for property damage and up to $2 million for business losses. Apex reported a loss of $2.5 million in inventory due to the burglary. The insurer paid $600,000 to Apex, claiming that the burglary was only one occurrence. Apex received a second payment of $673,477 for business losses.
After failing to resolve their dispute on the business loss calculations, Apex sued Falls Lake for breach of contract and bad faith. Apex argued that the burglary actually constituted two occurrences since inventory was stolen from two vaults