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NEW judge rejects restaurant chain COVID-19 BI suit



A New York judge has agreed to dismiss COVID-19 related business interruption disputes from a Dallas-based restaurant chain against a Swiss Re Ltd. entity.

Judge Jennifer G. Schecter of the New York Supreme Court in Manhattan dismissed Consolidated Restaurant Operations Inc. v. Westport Insurance Corp. in an order on one page Wednesday.

Consolidated Operations said in a complaint filed in August 2020 that it operates 27 full-service and 27 franchise restaurants in 12 states and the United Arab Emirates. It said it had bought $ 50 million in one-time business break insurance from Westport to cover "all risks." Its main position is that neither the virus nor the accompanying disease causes physical loss or damage to property as the terminology is insured in the All-Risk Policy. "

" That position contradicts the clear meaning of the coverage language and case law in New York and throughout the country that interprets the same or similar languages, "the chain said in its complaint, which accused the insurer of breach of contract.

Westport said in a court in May that 1

6 courts in New York, including four state and 12 federal courts, "have unanimously concluded that termination is entirely appropriate because the actual or suspected occurrence of COVID-19 is not" directly physical loss or damage "on property sufficient to trigger coverage."

Last month, a federal district court in New York dismissed COVID-19 interruption disputes from a New York health system against American International Group Inc. and Allianz SE entities stating the losses were not caused by direct physical loss or damage required. of the coverage.

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