“href =” https://www.law360.com/insurance/articles/1388907/# “> Daphne Zhang
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Law360 (May 27, 2021, 9:15 p.m. EDT) – A Michigan federal judge dismissed two restaurants’ COVID-19 lawsuit against the company Thursday Cincinnati Insurance Co.The restaurants could not prove that they suffered any damage to property that was covered by the insurance.
U.S. District Judge Bernard A. Friedman gave Cincinnati a summary judgment, stating that The Brown Jug Inc. could not claim that its pandemic losses triggered the restaurant owner’s $ 655,000 all-risk policy.
“The interruptions in daily life caused by the COVID-19 pandemic do not cause any property damage, the judge said. “The natural meaning of the terms” accidental physical loss or accidental physical damage “requires that the insured suffer damage other than that claimed in the present case.”
The Brown Jug owns two restaurants in Ann Arbor, The Little Brown Jug and The Back Room. According to the lawsuit, the restaurants had to close due to the pandemic and government shutdown orders last year and lost access to the locations, resulting in significant financial and physical losses of their property.
But Cincinnati denied coverage after the restaurants filed insurance claims, claiming the restaurants suffered no direct physical loss or damage, a requirement for coverage. Brown Jug has argued that the coronavirus, which is airborne and transmitted by droplets, can cling to a property surface for days and cause physical damage.
The restaurants claimed that their all-risk policies did not exclude viruses or pandemics, so they were eligible for coverage.
None of the Brown Jug’s alleged losses – including the cost of cleaning and moving furniture and lost income from government contracts – were tangible physical losses as required under the directive, Judge Friedman said Thursday.
While the restaurants said they needed to disinfect surfaces and rearrange the physical space, they showed no repairs or replacements, the judge added, agreeing with the “vast majority” of courts that have found the coronavirus and is not causing property damage not covered by industrial property guidelines.
More than 80% of COVID-19 business interruption lawsuits filed by companies against their insurers have been finally dismissed in federal courts, according to court information from the University of Pennsylvania’s Carey Law School.
Representatives of the parties could not be reached immediately for comment on Thursday.
The restaurants are represented by James J. Kelly from Jim Kelly Law PC.
The case is The Brown Jug Inc. v Cincinnati Insurance Co., case number:2: 20-cv-13003, by doing U.S. District Court for the Eastern District of Michigan.
– Editing by Rich Mills.
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