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Maryland contract-frustration coverage guide

In Critzos II, a brewery/pub lease did not restrict the tenant to indoor dining or prohibit takeout and delivery. Although Maryland’s March 16, 2020 order closed restaurants and bars to the public, it expressly permitted prompt carryout, drive-through and off-premises delivery; the Appellate Court held the lease’s purpose was not legally impossible and lost revenue did not establish frustration. The order also had separate scopes and exceptions for health-care food service and fitness-center childcare. A tenant assessing public-order risk should compare the exact promised use, lawful alternatives, dates and rent duty in its lease. This ruling addresses contract defenses, not insurance coverage. 1,2

What Is Contract Frustration?

Contract frustration may fit your business when an international contract is exposed to political disruption or government action. If your main risk is a customer who cannot pay, compare trade-credit coverage instead. Read the national Contract frustration guide.

What to Watch for in Maryland

  • Read the use clause and permitted alternatives together

    The published Critzos II opinion held that closure orders did not make the lease’s sole purpose illegal because the lease did not restrict use to indoor, in-person food service and did not bar carryout or delivery. Ask whether your lease identifies an exclusive use, prohibits alternate operations, permits substitution, or keeps rent due while one channel is closed. 1,2

  • The historical order had specific scope and exceptions

    The March 16, 2020 order closed restaurants and bars to public consumption at the premises but allowed food or beverages promptly removed for carryout/drive-through or delivered off premises. It excluded health-care food service from its restaurant definition. Fitness centers were separately closed, with a childcare exception for portions licensed or permitted to provide childcare. This is historical order scope, not current operating guidance. 2

  • Reduced revenue did not itself eliminate the lease duty

    The appellate decision found no legal impossibility where lawful alternative restaurant service remained available; economic difficulty alone was insufficient on these facts. A buyer evaluating business interruption or contract frustration should distinguish the thing the counterparty promised from the tenant’s revenue opportunity and review the policy’s actual insured event and loss terms separately. 1

Who Regulates Insurance in Maryland

Maryland Insurance Administration

The Maryland Insurance Administration licenses producers and insurers, reviews rates and forms, and investigates complaints about insurance companies and producers. You can use its state lookup or complaint service to check a license or raise an insurance issue. 3,4,5

Surplus-lines tax and stamping office

Reported tax rate: 3% of gross premiums less returned premiums when Maryland is the insured's home state; excludes risks of Maryland and its political subdivisions When Maryland is the insured's home state, the tax is 3% of gross premiums less returned premiums, except insurance of risks of the State or a political subdivision. For policies effective on or after July 21, 2011, Maryland taxes the entire premium and the broker must charge the tax in addition to premium. Maryland's property and casualty guaranty corporation excludes surplus-lines policies. 6,7

Providers With Documented State Licenses

No provider in Spot’s research documents both a state license record and this coverage line. This does not establish that providers are unlicensed. Check the regulator’s license lookup and confirm availability with a provider when requesting a quote.

Questions to Ask Before You Buy in Maryland

  1. Does the lease make a specific use exclusive, and does it allow takeout, delivery, outdoor service or substitute operations?
  2. Which exact restriction applied, on what dates, and did it bar the contractually permitted use or only a preferred revenue channel?
  3. Does the agreement allocate continuing rent, cancellation, mitigation and alternative-use rights during an order, and what policy wording addresses the separately documented loss?

Contract Frustration in Maryland: FAQ

Did Maryland’s 2020 restaurant order make every restaurant lease impossible to perform? 1,2

No. Critzos II held that the particular lease remained usable for permitted carryout and delivery because it did not require indoor dining only. The order also excluded healthcare food service from the covered restaurant category. The result depends on the lease’s scope and the order’s text. 1,2

Does the contract ruling establish coverage for the tenant’s lost revenue? 1

No. It is a decision about defenses to rent obligations under one lease and one historical order. Insurance depends on the policy’s separate covered event, insured interest, loss measure, conditions and exclusions. 1

Contract Frustration in Other States

Other Coverage in Maryland

Sources

  1. Critzos II v. Marquis, 256 Md. App. 684, 287 A.3d 1281 (2023). Appellate Court of Maryland; Published opinion, pp. 5–16; restaurant/pub lease, permitted carryout/delivery, frustration and economic hardship. Accessed 2026-09-28.
  2. Amending and Restating the Order of March 12, 2020, Closing Bars, Restaurants, Fitness Centers, and Theaters (Mar. 16, 2020). Office of the Governor of Maryland; Full four-page order, §§V–VII; restaurant takeout/delivery and fitness-center childcare exception; effective 5 p.m. March 16, 2020. Accessed 2026-09-28.
  3. Maryland Insurance Administration. Maryland Insurance Administration; Homepage and consumer contact. Accessed 2026-09-28.
  4. Insurance License Lookup. Maryland Insurance Administration; State-designated producer/company search. Accessed 2026-09-28.
  5. File an Insurance Complaint. Maryland Insurance Administration; State complaint process and contact. Accessed 2026-09-28.
  6. Md. Code, Insurance §3-324. Maryland General Assembly; Insurance §3-324(a)-(b), (d)-(f): government-risk exclusion; 3% of gross premiums less returns; entire-premium home-state basis from July 21, 2011, with tax charged in addition. Accessed 2026-09-28.
  7. Maryland Insurance Article (2026). Maryland General Assembly; Insurance §9-303(5), (7): surplus-lines and unauthorized insurers excluded from property and casualty guaranty subtitle; 2026 Insurance Article PDF. Accessed 2026-09-28.
  8. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  9. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  10. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  11. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  12. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  13. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  14. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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