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Insurance companies win more covid-related business breakdown decisions



Two federal appellate courts have issued additional judgments against policyholders in covid-19-related cases of business interruption, both referring to previous decisions.

Friday’s rulings were handed down by the 11th U.S. Court of Appeals in Atlanta Town Kitchen LLC v. Certain Underwriters at Lloyd’s, London et. al and of the 7th U.S. Circuit Court of Appeals in Chicago in Green Beginnings, LLC v. West Bend Mutual Insurance Co.

The 11th district upheld a decision by the U.S. District Court in Miami in the lawsuit, which was filed by a restaurant in Miami. In its judgment denying coverage, a panel of three judges of the Court of Appeal referred to the Court̵

7;s previous decision in SA Palm Beach LLC v. Some underwriters at Lloyd’s, London, et. al and an Florida appellate court in the state Commodore, Inc. v. Some underwriters at Lloyd’s.

Town Kitchen “failed to claim that its losses and expenses were covered” under its policy, the ruling said. “Nor could it correct that shortcoming in the reporting, given the holdings SE Palm and Commander“, it was stated in the judgment.

The policyholder’s attorney Jason S. Mazer, shareholder in Cimo Mazer Mark PLLC in Miami, said in a statement that he is disappointed with the decision.

“Whether the virus that causes covid-19 can cause” physical loss of or damage to “property because it makes a company unsafe for human habitation under an” all-risk “policy without a virus exclusion has never been decided by the Florida Supreme Court,” he said.

“It is no different from other harmful substances, such as gas fumes, harmful odors, ammonia, asbestos, etc., which many courts have found to trigger coverage even if they do not cause structural damage and can be cleaned.”

The statement also said that “whether the virus that causes covid-19 significantly alters property by poisoning the air in a building should not have been resolved by a federal court on a motion to dismiss.”

The 7th circle quoted its previous results in Sandy Point Dental, PC v. Cincinnati Insurance Co. and Paradigm care & Enrichment Center LLC v. West Bend Mutual Insurance Co. by affirming a judgment of the U.S. District Court in Milwaukee in the judgment against a child care facility in Chicago.

IN Sandy Point“we found that covid-19 has a negligible effect on physical property, because ‘it can be wiped off surfaces with ordinary cleaning materials, and it decomposes on its own within a few days, leaving the property physically unchanged”, the three-page verdict said.

The lawyers in the case had no comments or did not respond to a request for comment.

On Wednesday, Wisconsin’s Supreme Court became the third state Supreme Court to rule on policyholders in disputes over covid-19 business interruptions.


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