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The restaurant chain's virus – related cost of continuing towards Zurich



A federal district court in Cleveland has refused to dismiss COVID-19 business interruption litigation brought by a restaurant chain against a Zurich insurance group unit and considers its policy language ambiguous, and a "micro-organism" exclusion is not applicable.

Twinsburg, Ohio-based Henderson Road Restaurant Systems Inc., which operates restaurants in Ohio, Pennsylvania, Michigan, Indiana and Florida, filed a lawsuit against Zurich American Insurance Co. in the U.S. District Court in Cleveland after denying its company termination in April. according to the Tuesday ruling of the U.S. District Court in Cleveland in Henderson Road Restaurant Systems Inc. Zurich American Insurance Co.

The chain closed its restaurants in March in response to government orders, according to the decision

Zurich's policy language is "reasonably receptive to more than one interpretation", the decision states. The policy stipulates that it will pay for "direct physical loss of or damage to" real estate "… Based on this language, the plaintiffs claim that physical loss of the property means something other than damage to the property and this is a valid argument.

“Otherwise, why would both phrases appear side by side separated by the disjunctive conjunction & # 39; or & # 39 ;? The plaintiff claims that they lost their property when the state governments ordered that the properties could no longer be used for is receptive to this interpretation. "

The ruling also argued that the exclusion of micro-organisms does not apply because" it did not identify the possibility "that even the absence of any micro-organism activity that damages the property, "The plaintiff may be forced to close his dinners due to government decisions responding to a public health crisis."

Me The court gave the plaintiff a summary judgment in the insurance matters, denying its unbelief and pointing out that it "had a reasonable justification to establish that there was no coverage under its policy " because other courts "have agreed with the arguments put forward by Zurich and found in favor of insurers.

Zurich and defendants' lawyers did not respond to a request for comment.

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