The court agreed with the plaintiffs that they had sufficiently alleged that the direct physical loss triggered the civil authority coverage within the policy.

The all-women team representing the plaintiffs included Robin Cohen, member of the Insurance Coverage Law Center's Editorial Advisory Board and chair of Cohen Ziffer Frenchman & McKenna, and partners Jillian Raines and Meredith Elkins, and counsel Tali Epstein.

Cohen made the following comments about the case, one of few so far that seem to favor the policyholder at this point in litigation.

"This decision is a victory that will resonate beyond Cook County for policyholders seeking business interruption insurance arising from the pandemic.  This is in key part because–even in Illinois' more stringent "fact pleading" as opposed to "notice pleading" jurisdiction—Judge Mitchell found that allegations of COVID-19 on premises or being transmitted to surfaces and air sufficiently alleges "physical loss or damage."  These allegations overcame a motion to dismiss even where physical or material "alteration" concepts are being read into policies that, in fact, contain no such express requirement. In other words, regardless of whether COVID-19 visibly changes property, allegations of COVID-19 altering surfaces and property from "safe and breathable to unsafe and dangerous" sufficiently allege physical loss or damage such that insureds should be permitted to prove their case in discovery and trial (as JDS now can and will).  No matter the industry or size, policyholders across the country can use this case as a guide.   

This decision also undercuts carriers' efforts to date to short-circuit all pandemic insurance cases by ignoring the policy language unique to their insureds and instead relying on the alleged volume of early and often extra-jurisdictional trial court decisions to try and persuade Judges that if they don't dismiss, too, they're outliers. But the reality is, not all policy language is the same, particularly when it comes to civil authority and other business interruption coverage extensions for which policyholders often pay substantial premiums. Judge Mitchell thoughtfully recognized that here. He also acknowledged that the science is still developing around how COVID-19 alters and impacts the physical surfaces and air with which it comes into contact, and that insurer lawyers' arguments are not a substitute for scientific, expert testimony, and certainly not at such an early stage of these cases. Judges who are willing to dig in and apply the proper standard on a motion to dismiss (taking allegations as true) are aptly accounting for this nuance. Policyholders pay varied (often substantial) premiums for varied levels of protection, and despite carriers' best efforts to show otherwise, many policies reflect a clear intent to cover exactly the types of business interruption losses so many businesses have suffered. Allowing JDS's case to proceed bolsters the blueprint other insureds can use to help show they, too, should be given an opportunity to prove their case through discovery and trial. This decision shines a bit of a bright light after a dark time for so many businesses."

Robin Cohen is Chair of Cohen Ziffer Frenchman & McKenna. The firm's work has resulted in precedent-setting rulings allowing policyholders in various industries, including real estate, hospitality, and entertainment, to seek coverage for business losses despite the insurance industry's attempt to defeat coverage claims through early dispositive motions.