A chiropractic practice in Michigan is not covered for COVID-19 losses under company policy with State Farm, a federal judge ruled Thursday in a decision on the words "to", "of" and "or" in commercial insurance  The policy only covers lost income in the event of physical damage to a property, and even if that was not the case, the virus exclusion in the policy would prevent pandemic-related coverage, the judge ruled.
The judgment adds to the growing list of insurers that win in the issue of business interruption coverage for coronavirus-related losses.
In the case Turek Enterprises Inc., c / o Alcona Chiropractic v. State Farm Mutual Automobile Insurance Co., State Farm Fire and Casualty Co., a chiropractic-based Harrisville, Michigan-based practice sought coverage for losses incurred as a result of government assignments by non-essential corporations in March, following the spread of COVID-1
The lawsuit filed in June in the U.S. District Court of the Eastern District of Michigan Northern Division filed a class action lawsuit. State Farm filed a motion to dismiss the lawsuit.
In the State Farm judgment, Judge Thomas L. Ludington noted that the policy formulation required direct physical loss to a covered property in order for business interruption coverage to be triggered.
"The plaintiff proposes that" physical loss of covered property "includes the inability to use covered property. … This interpretation seems to agree with a definition of "loss" but ultimately renders the word "to" meaningless. & # 39; Till & # 39; used here as a preposition indicating contact between two nouns, & # 39; direct physical loss & # 39; and & # 39; covered property & # 39; ", stated in the decision.
The policyholder's argument may be probable if the policy offered coverage for" direct physical loss of covered property, "according to the decision.
State Farm's interpretation is also consistent with other court decisions in the matter, in particular a federal court decision in Texas in August against a group of barbershops seeking business interruption.
A separate federal court ruling in favor of a group of hair salons in Missouri that sued their insurer did not help the chiropractor's case, the judge said.
The current policy in the Missouri case "Covered losses due to" unintentional physical loss or unintentional physical damage to property ", and the policyholders in that case claimed that the virus was present on their premises. However.
In the Michigan case "On the other hand, the appellant claims that COVID-19 never entered its premises", the decision states.
Although the policy statement on direct physical loss allowed for business interruption coverage, exclusion from the policy would still prevent coverage, the judge ruled.
"The simple, unequivocal meaning of virus exclusion today abolishes coverage," he said in the decision.
A lawyer representing the policyholder did not immediately respond to a request for comment.
The judgment is one of several recently decided COVID-19 decisions that have benefited insurers. On Wednesday, a federal judge in Florida ruled that the exclusion of the virus in a dentist's commercial insurance does not cover coverage for losses suffered by the dentist while locking in coronavirus.
More insurance and risk management news about the coronavirus crisis here . Catalog