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The Cincinnati Insurance Co. Inc., does not have to pay a Kansas City, Missouri, restaurant management group that was forced to close at least nine restaurants as a result of coronavirus stay-at-home orders, a jury decided last week in federal court.
The jury sided with the insurance company Thursday in the U.S. District Court for the Western District of Missouri, determining it did not owe the restaurant group, K.C. Hopps, Ltd., coverage for losses brought on by the pandemic.
"We are pleased that they unanimously agreed with us that our commercial property insurance does not provide coverage for these COVID-19 losses," said company spokeswoman Betsy Ertel. "We know that many businesses have been impacted by the COVID-19 pandemic. We have, continue to be, committed to doing our part to support the families and businesses in our agents' communities, including helping them proactively manage risks and promptly paying covered claims."
The defendant's attorney, Michael Brown of Wallace Saunders-OPKS, declined to comment. A message seeking comment from Abby McCllelan, who represents K.C. Hopps, Ltd., was not immediately returned.
The plaintiff filed the lawsuit in June 2020, alleging the insurance company breached its contract by denying coverage for COVID-19-related losses. This past September, Judge Stephen Bough granted in part and dismissed in part the defendant's motion for summary judgment.
Bough found that the Eighth Circuit's ruling in Oral Surgeons barred K.C. Hopps from proceeding on the theory that a government shutdown order constituted a covered "physical loss" or "physical damage" to its restaurant. But the district court also found that "whether the virus was present on plaintiff's premises, whether it actually caused a physical loss or physical damage to plaintiff's premises, and the extent of plaintiff's damages due to that 'loss' are genuine issues of material fact which preclude summary judgment."
The two-day trial started Oct. 26.
The plaintiffs' restaurants and food services included in the lawsuit were O'Dowd Gastrobar; The View at Briarcliff Event Space; Blue Moose Bar & Grill; Barley's Brewhaus; Relish Classic Catering and Moose Truck food truck; Stroud's Overland Park; and a limited liability company providing food, beverage, and catering services at Hy-Vee Arena.
Editor's Note: This was the first jury trial on the business interruption issue. The jury's verdict largely tracks with other COVID-19 business interruption decisions handed down by judges across the country. The world seems split when deciding these business interruption cases. The U.K. Supreme Court sided with policyholders in that countries test case, but the Australian test case was found in favor of the insurers.