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Travelers get victory in case of business interruption in COVID-19



A unit of Travelers Cos. Inc. won the dismissal of a coronavirus-related business break suit on Friday, adding to the growing list of court decisions to find business disruptions stemming from the pandemic do not constitute loss of or damage to property. [19659002] 10E LLC v. Travelers Indemnity Co., of Connecticut et al. A federal court in Los Angeles granted the Traveler's motion to dismiss a lawsuit filed by the owners of 10E, a local restaurant seeking coverage for revenue lost as a result of mandate closures beginning in March after the COVID-19 outbreak.

The restaurant claimed that the inability to use its property during the closures amounted to direct physical loss or damage under the terms of its commercial insurance policy issued by travelers.

However, the court ruled that in previous insurance cases, California courts had determined that physical loss occurs when a property undergoes a "distinct, demonstrable, physical change."

According to the decision, an insured person cannot recover by attempting an artificial write-down to the economically valuable use of property such as physical loss or damage to property.

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0E was represented by Mark Geragos, a well-known Los Angeles attorney who also sues travelers for business interruption coverage that he claims his law firm is entitled to due to suspensions and damages to commercial property he owns.

Mr. Geragos did not immediately respond to a request for comment.

The judgment is the latest in a series of COVID-19 decisions on business interruptions and legal proceedings that have largely benefited insurance companies. Last week, for example, a Miami-based magistrate recommended that a U.S. district court dismiss a COVID-19 business interruption coverage filed by an Italian restaurant against an XL Group Ltd. entity.

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

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