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The restaurant's COVID-19 business interruption cost to continue



An Ohio state judge on Thursday refused to dismiss a COVID-19-related business interruption lawsuit filed by a restaurant in North Canton against its insurer, citing the restaurant's civil authority coverage and political support for foodborne illness.

Nick Sylvester's North End Italian Grille said that Columbus, Ohio-based State Automobile Mutual Insurance Co. refused to pay for COVID-19 related business interruption costs under its all-risk policy, according to the complaint filed in May in the Court of Common Pleas. in Canton Sylvester and Sylvester, Inc., d / b / a Nick Sylvester & # 39 ;s North End Italian v. State Automobile Mutual Insurance Co., d / b / a / State Auto Insurance Cos. Police did not contain viruses or pandemics, according to the complaint.

The insurer based its denial of coverage on 26 March on its claim that there was no direct physical loss of or damage to the premises and to insurance exclusions, according to the complaint. It seeks an explanatory verdict and accuses the insurer of breach of contract and bad faith.

In refusing to dismiss the case, the Court pointed to policy support for foodborne illness and its civilian authority coverage.

"State Auto urges the Court to limit the application of its additional coverage entitled" Food-Borne Illness Endorsement "with the intention of covering only" risks arising from or related to food. "

"However, the extent of the coverage is not determined by the headings or titles used by the insurer, but by the policy language itself," the decision states.

"The policy language does not contain any restriction that the risks must be related to food, but rather" contagious or contagious disease "," it said.

The decision states that State Auto "also seems to argue that the restaurant's claim must fail because the state's order to close the restaurant was not specifically directed at Sylvester or because there is no claim about onavirus was in fact detected in Sylvester's premises, "the decision states.

"The simple language of the policy, however, provides coverage for either actual or" alleged "exposure of the premises to a contagious disease."

Nothing in the language of the policy is required "that the civil authority's order be directed specifically at Sylvester rather than the restaurant industry more generally, "it said, denying State Auto's draft ruling on the submissions.

Restaurant Attorney Gary A. Carroto, a partner of Tzangas Plakas Mannos Ltd. in Canton, said in a statement: "Situations like this are exactly why Sylvester and other local businesses and their hard-working business owners made the significant financial investment in business breakdown coverage."

A State Auto spokesman had no comment.

Last month, a federal district court in Virginia refused to dismiss a COVID-1

9 related business interruption lawsuit filed by a spa against a state. Farm Mutual Insurance Co. unit despite its policy exclusion of viruses.

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

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