Insurer wins in first COVID-19 jury trial – Community News
Covid-19

Insurer wins in first COVID-19 jury trial

As we previously reported, Judge Bough of the U.S. District Court for the Western District of Missouri dismissed an insurance company’s claim for summary judgment in KC Hopps Ltd. against The Cincinnati Ins. Co. Inc., no. 20-cv-00437-SRB (WD Mo. Sept. 21, 2021) and sent the case to court.

On October 28, after a three-day trial, the jury ruled in favor of the insurer. The case involved claims by a group of restaurants under the business income (and additional expense) cover form of their insurance policies. Under that coverage, the insurer is required to pay for the insured’s actual loss of business income when it has to suspend its operations due to physical loss or damage to the insured’s property. Note that the Court previously ruled that “evidence of physical contamination is sufficient to satisfy the policy’s requirement for physical loss or damage.”

At the conclusion of the case, the insurer filed a request for a legal decision on the grounds that the policyholder had failed to demonstrate that his property had been physically damaged by COVID-19 and required repair before operations could resume. Although the Court dismissed the motion, it provides a window into some of the key testimonies that may have convinced the jury.

According to the motion, the plaintiff admitted that he never attempted to determine whether COVID-19 was on his property and one of his experts, a molecular epidemiologist, testified that none of the policyholder’s nine rooms were tested for the presence. of COVID-19. restaurant locations. Likewise, a chemical enzymology expert testified that COVID-19 can be removed and inactivated by cleaning, as well as spoiling on its own, the insurer said. The insurer has therefore argued that the policyholder has not provided evidence that COVID-19 was present on its premises and could therefore not establish physical contamination.

In addition, the restaurant group owner testified that the restaurants were not closed in February despite knowledge of COVID-19. Instead, the restaurants only closed after government demands, and reopened once orders became less restrictive. The insurer therefore argued in its application that “[e]even if Plaintiff’s evidence showed physical contamination to any of his properties, which is not the case, Plaintiff’s evidence demonstrates that the alleged loss was not caused by any physical loss, damage, or contamination caused by the virus , but instead was caused solely and wholly by Plaintiff’s compliance with governmental decisions affecting the operation of his premises.”

The verdict form did not state the reason for the verdict, so we don’t know if either or both of the insurer’s arguments were convincing. But the lawsuit re-emphasizes the evidence policyholders must develop — at the very least, evidence of physical contamination of the property from COVID-19 — to obtain coverage for business interruption from COVID-19.

© 2021 Epstein Becker & Green, PC All rights reserved.National Law Review, Volume XI, Number 315