A federal judge in Missouri announced on Monday his second decision in favor of policyholders with coronavirus-related business interruptions.
U.S. District Court Judge Stephen R. Bough denied Lansing, Michigan-based Owners Insurance Co.'s proposal to dismiss a lawsuit filed by a dental team seeking coverage for lost income due to mandatory COVID-19 lockdowns.
The verdict comes about a month after Judge Bough issued one of the first verdicts in favor of a policyholder in a pandemic-related case. Hundreds of policyholders have sued their insurers, but most of the early decisions have been in favor of insurers, including a decision in a federal court in Illinois on Monday in a case brought by another dental office.
In the case of Missouri ̵
The policyholders claimed that the presence of the virus in or around their offices damaged the properties.
Referring to his earlier decision in Studio 417 Inc. v. Cincinnati Ins. Co., Judge Bough noted that the policy did not define the term "direct physical loss."
"To regard the plaintiff's factual allegations as true, as the court must at this stage, and having drawn reasonable conclusions from those facts in their favor, the plaintiffs probably claim that COVID-19 physically joined their dental clinics and thereby deprived them the ownership and use of the insured properties, "states the decision.
A Lake Zurich, Illinois-based dental office. on Monday received a less favorable decision on its pandemic-related claim with Cincinnati Insurance. v. Cincinnati Insurance Co. Judge Robert W. Gettleman of the Northern District of Illinois Eastern Division said the dental policy required physical injury to trigger coverage.
"The plaintiff is essentially seeking insurance coverage for financial losses due to closure orders. Coronavirus does not change physical appearance , shape, color, structure or other material dimension of the property failed to invoke a direct physical loss – a condition for coverage, "the decision states.
Sandy Point Dental was part of a wave of hundreds of policyholders suing their insurers earlier this year for mandatory lock-in measures.
Of about a dozen decisions to date, most have benefited insurers.
The case Studio 417 however, brought by a group of hairdressers and restaurants, was scheduled for mediation after the policyholders won the first round of disputes.
In addition to the two Missouri cases in favor of policyholders, a New Jersey state court ruled last month that Optical Services USA / JC1 v. Franklin Mutual Ins. Co. could continue. The policyholder in the case argues that "physical damage occurs where a policyholder loses the functionality of his property", said court documents.
More insurance and risk management news about the coronavirus crisis here . Catalog