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Court disses restaurant’s ‘direct physical loss’ theories in COVID-19 suit

The key question in many COVID-19-related insurance disputes is what constitutes “direct physical loss,” a federal court recently explained as it rejected a plaintiff’s breach of contract claim against the insurer.

Caesars Entertainment sues over COVID-19-related economic damages

On March 19, Caesars Entertainment joined the long list of businesses that have filed lawsuits against their insurance companies for refusing to pay business interruption losses stemming from COVID-19-related government shutdowns of economies across the nation and world.

Derek Scott Williams PLLC v. Cincinnati Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss the claim of plaintiff as to coverage for loss of business income but does dismiss the claim of coverage under the civil authority provision of the policy. The court found the wording of the policy sufficiently vague, especially as to the meaning and definition of the word “loss.” In the case of the civil authority provision of the policy, the court decided that plaintiff has not alleged that “[a]ccess to the area immediately surrounding the damaged property is prohibited by civil authority.”

Court Declines Motion to Dismiss Claim of Coverage for Loss of Income, but Dismisses the Claim of Coverage Under the Civil Authority Provision

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss the claim of plaintiff as to coverage for loss of business income but does dismiss the claim of coverage under the civil authority provision of the policy. The court found the wording of the policy sufficiently vague, especially as to the meaning and definition of the word “loss.” In the case of the civil authority provision of the policy, the court decided that plaintiff has not alleged that “[a]ccess to the area immediately surrounding the damaged property is prohibited by civil authority.”

Family Tacos, LLC v. Auto Owners Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants motions of the defendant to dismiss claims of the plaintiff. The plaintiff files claims for coverage under its insurance policy for losses resulting from COVID-19 shutdowns and seeks to establish a class. The court decides that coverage is not provided under the policy because there is no physical loss; the civil authority provision is likewise not effective, and there is a virus exception that is applicable to the case at hand.

Plaintiff Fails to Convince the Court That Physical Loss or Physical Damage Has Occurred; Virus Clause Applies and Defendant’s Motion to Dismiss Is Granted

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants motions of the defendant to dismiss claims of the plaintiff. The plaintiff files claims for coverage under its insurance policy for losses resulting from COVID-19 shutdowns and seeks to establish a class. The court decides that coverage is not provided under the policy because there is no physical loss; the civil authority provision is likewise not effective, and there is a virus exception that is applicable to the case at hand.

AFM Mattress Co. v. Motorists Commercial Mutual Insurance Company

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of plaintiff. While plaintiff claims losses due to COVID-19, it does not sufficiently move the court to consider the virus exclusion of the policy inapplicable. A motion for a sur-response to espouse an alternative theory was also denied but without prejudice.

In COVID-19 Business Interruption Case, Court Finds Plaintiffs Did Not Argue Physical Loss and Virus Exemption Applies

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of plaintiff. While plaintiff claims losses due to COVID-19, it does not sufficiently move the court to consider the virus exclusion of the policy inapplicable. A motion for a sur-response to espouse an alternative theory was also denied but without prejudice.

Graspa Consulting v. United Nat’l Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court dismisses plaintiff’s (a restaurant chain owner/operator) claims against insurance company; plaintiffs did not incur (nor did it assert) physical damages to premises as required by the terms of the insurance policy.

In COVID-19 Business Interruption Case, Court Grants Defendant’s Motion to Dismiss Plaintiff’s Claim for COVID-19-Related Losses

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court dismisses plaintiff’s (a restaurant chain owner/operator) claims against insurance company; plaintiffs did not incur (nor did it assert) physical damages to premises as required by the terms of the insurance policy.

S. Fla. Ent Assocs. v. Hartford Fire Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of the plaintiff. While the plaintiff claims losses due to COVID-19 shutdowns, the plaintiff fails to allege any actual harm to the insured property.

In COVID-19 Business Interruption Case, Court Finds Plaintiff ENT Practice Fails to Allege Any Harm to Insured Property

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of the plaintiff. While the plaintiff claims losses due to COVID-19 shutdowns, the plaintiff fails to allege any actual harm to the insured property. Key Words: COVID-19, coronavirus, damages, physical loss, insurance, business interruption loss, business interruption ...

Real Hosp., LLC v. Travelers Cas. Ins. Co. of Am.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court granted a motion by the defendant insurance company to dismiss claims of plaintiffs; plaintiffs did not argue that they sustained a physical loss, and coverage would have been denied nevertheless by the virus exemption.

In COVID-19 Business Interruption Case, Court Finds Plaintiffs Did Not Argue Physical Loss and Virus Exemption Applies

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court granted a motion by the defendant insurance company to dismiss claims of plaintiffs; plaintiffs did not argue that they sustained a physical loss, and coverage would have been denied nevertheless by the virus exemption.

In COVID-19 Business Interruption Case, Court Finds Business Cannot Show Insurer’s Coverage Denial Breached Contract

In business interruption case resulting from mandatory shutdowns to control COVID-19, court finds plaintiff chiropractic clinic failed to show insurer breached its policy; court says plaintiff did not demonstrate “tangible damage” to property and failed to overcome policy’s express virus exclusion.

Turek Enterprises, Inc. v. State Farm Mutual Automobile Insurance Co.

In business interruption case resulting from mandatory shutdowns to control COVID-19, court finds plaintiff chiropractic clinic failed to show insurer breached its policy; court says plaintiff did not demonstrate “tangible damage” to property and failed to overcome policy’s express virus exclusion.

Court ‘Sympathizes’ With Businesses Claiming COVID-19-Related Losses but Finds No Coverage Under Policy

In a business interruption case resulting from mandatory shutdowns to control COVID-19, court dismisses plaintiff barbershops’ claims against insurance company; plaintiffs failed to show accidental direct physical loss to premises as required for coverage and did not overcome express virus exclusion.

Diesel Barbershop, LLC v. State Farm Lloyds

In a business interruption case resulting from mandatory shutdowns to control COVID-19, court dismisses plaintiff barbershops’ claims against insurance company; plaintiffs failed to show accidental direct physical loss to premises as required for coverage and did not overcome express virus exclusion.

In COVID-19 Business Interruption Case, Court Finds Business Adequately Alleges It Suffered a Physical Loss

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss claims of plaintiffs; plaintiffs, inter alia, adequately allege that they suffered a physical loss due to COVID-19.

Studio 417 v. Cincinnati Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss claims of plaintiffs; plaintiffs, inter alia, adequately allege that they suffered a physical loss due to COVID-19.

BVU News and Trends July 2020

A monthly roundup of key developments of interest to business valuation experts.

Business interruption trends and cases triggered by COVID-19

The gleaming billboards of Times Square went dark on May 27 for one minute to alert the nation that pandemic-related business interruption insurance claims are being denied by insurers.

BVU News and Trends May 2020

A monthly roundup of key developments of interest to business valuation experts.

Does business interruption insurance decrease company-specific risk?

Business valuers often ‘tic the box’ on property and casualty insurance policies as part of their management interviews.

No act of God excuse for Victoria’s Secret buyer—February agreement excepted pandemic

In the wake of COVID-19, a number of buyers have resorted to force majeure (aka act of God) clauses to withdraw from deals.

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