A California Court of Appeal recently held that the alleged loss
of use of a premises as a nightclub qualified as "property
damage" under a general liability insurance policy. Thee
Sombrero, Inc. v. Scottsdale Ins. Co., 2018 WL 5292072 (Cal.
Ct. App. Oct. 25, 2018).
Thee Sombrero, Inc. (Sombrero) owned and operated a nightclub in
Colton, CA. After a fatal shooting at the club, city officials
revoked Sombrero's use permit and made it so the premises could
only be used as a banquet hall. Sombrero sued its private security
company, Crime Enforcement Services (CES), claiming that its subpar
security caused the shooting and cost Sombrero its ability to run a
nightclub on its property.
