A Chicago judge has ruled in favor of a Wisconsin insurer in 17 separate COVID-19 business interruption cases. The cases were filed by a group of restaurants against Society Insurance Inc, and are called Station Two LLC, d/b/a/ Firehouse Grill et al. v. Society Insurance Inc.
Similar to other COVID-19 business interruption cases, this one went against policyholders. In this case, the judge said that the plaintiffs in the case failed to establish the direct physical loss required by the coverage.
The ruling said that the Court did not find any ambiguity in the Policies regarding "direct physical loss or damage to covered property," which would trigger coverage. The plaintiffs asked the court to find that COVID-19 particles caused "direct loss of" or "damage to" property, but the court was not persuaded.
The opinion also said "[s]ince the existence of the particles is not visible to the naked eye and cannot be seen or felt, any purported damage is not 'physical in nature."
In February, the U.S. District Court in Chicago refused to dismiss multidistrict COVID-19 business interruption litigation filed against an insurance company. In Station Two Judge Jacobius said he disagreed with that ruling, which "found only a genuine issue of material fact as to whether a reasonable jury could find physical loss of use of the property can trigger coverage."
The decision also cited an earlier ruling when granting the insurer's motion to dismiss the case, and said "[a]dditionally, most of the litigation in the United States District Court of Illinois as well as other cases in the Circuit Court of Cook County, found no coverage under the insurance policy because 'plaintiff(s) ha(ve) not pled any factors showing physical alteration or structural degredation of the property.'"
Editor's Note: This decision came down as the Onterio Superior Court cleared a class-action lawsuit against 14 Canadian property and casualty insurers who allegedly owe billions in business interruption insurance payouts to companies that were forced to shut down during the COVID-19 pandemic. The claim accused insurers of dishonoring the terms of business interruption policies and denying business interruption payouts.
While we have seen different outcomes across country borders, American courts seem to be siding with insurers while other countries seem to be more policyholder friendly. This may be due to policy language differences or differences in interpretation when these cases get to the courts.