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The restaurant's COVID-19 action against the insurer may continue: the court



Physical injury is not necessarily visible to the eye, a federal district court said last week when it refused to dismiss a COVID-19 business interruption lawsuit filed by Alabama restaurants.

Three restaurant companies, including North Birmingham, Alabama-based Serendipitous LLC, had claimed that the terms of "loss" under Cincinnati Insurance Co .:'s coverage were ambiguous, according to Thursday's decision by the US District Court in Birmingham Serendipitous LLC / Melt et al. v. Cincinnati Insurance Co.

The insurer had claimed that the restaurants had not identified the physical loss or damage to property needed to trigger coverage, according to the decision.

"The restaurant has alleged facts which, if proven, constitute actual physical loss of its buildings and furniture during the pandemic," the decision states.

"The fact that the COVID-1

9 virus has not physically altered the property of the restaurants does not mean that coverage is not necessarily available for impact on the property that is invisible to the naked eye.

" The policy language indicates that the insurer understands that an insured can "Cincinnati could have ruled out invisible substances such as viruses but did not," the decision said, denying Cincinnati Insurance.

A Cincinnati spokeswoman said in a statement, "We respect the legal process. As this case continues, we believe that the language of our insurance contract will finally be applied.

"Our insurance for commercial real estate requires direct physical loss or damage to property and does not provide coverage in this case."

Plaintiff's Attorney James Williams, shareholder in Sirote & Permutt P.C. in Birmingham, Alabama, said in a statement: "We are very pleased with the court's ruling and look forward to continuing the litigation."

Last week, a federal district court in Texas refused to dismiss a COVID-19 business interruption coverage case filed by the film chain Cinemark, stating the company's claim that the virus had damaged property was covered by its policy.

More news on insurance and risk management about the coronavirus crisis here . Catalog

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