A federal appeals court on Wednesday upheld a lower court ruling against a group of “gentlemen’s clubs” in litigation over covid-19 business interruptions filed against a Beazley PLC unit and Lloyd’s of London underwriters.
The U.S. Circuit Court of Appeals in San Francisco said the plaintiffs in the case are 24 affiliated companies “operating 23 so-called” gentlemen’s clubs and a retail store “under a single policy issued by Beazley Underwriting Ltd. to a non-party affiliate, Norco, California-based The Spearmint Rhino Cos. Worldwide Inc., according to the judgment in Rialto Pockets Inc. v. Beazley Underwriting Ltd. and certain insurers at Lloyd̵7;s London, including Beazley Furlonge Ltd.
In upholding a U.S. District Court ruling in Los Angeles, the 9th Circuit, which issued its verdict without holding an oral argument, cited last year’s ruling from an appeals court in the state of California in Inns by the Sea v. California Mutual Insurance Co.
That ruling stated that “in accordance with well-regulated California insurance laws,” only the loss of use of physical property to generate business income, without any other physical impact on the property, does not provide coverage for direct physical loss. … So here too. ”
Lawyers in the case did not respond to requests for comment.
On Friday, the 9th Circuit also ruled the Las Vegas casino Circus Circus in similar litigation.