The U.S. District Court in Chicago refused to completely dismiss a Covid-19-related lawsuit filed by an Italian luxury hotel owner against a unit of Zurich Insurance Group Ltd. based on its claim of “cancellation of bookings”.
The court, in Tuesday’s ruling, agreed to dismiss most of the Covid-19-related claims filed by Rome-based Q Excelsior Italia SRL against Zurich American Insurance Co., according to the ruling in Q Excelsior Italia SRL v. Zurich American Insurance Co.
The court noted that the 7th US Circuit Court of Appeals has repeatedly held that “the mere loss of use due to covid-related closures does not constitute “direct physical loss”; when unaccompanied by any physical change to property.”
The ruling said the parties agree that a cancellation of reservations in Q Excelsior’s policy covers losses resulting from cancellations attributable to, among other things, outbreaks of communicable diseases and travel restriction advisories issued by authorities.
But Zurich argued that Q Excelsior was not entitled to damages from the insurer’s refusal to pay under the cancellation provision because it had exhausted its coverage under that provision.
This “goes to the merits,” the district court said, by refusing to dismiss the case.
However, the ruling said that Zurich can request a summary judgment on that claim at any time if it can indisputably show that Q Excelsior has not suffered any injuries.
Attorneys in the case did not respond to requests for comment.