A federal district court in Cleveland agreed to dismiss COVID-19 business interruption litigation filed by a hotel chain against a Travelers Cos Inc. unit, arguing that the mere physical presence of the virus on its property does not constitute physical loss
Westlake, Ohio-based Ceres Enterprises LLC, which operates hotels in Ohio, Indiana and Minnesota, filed claims for lost business revenue under its insurance with Travelers Insurance Co. and was denied by the insurer, according to Thursday's ruling by the U.S. District Court in Cleveland Ceres Enterprises LLC against Travelers Insurance Co.
The hotel claimed in its lawsuit, which accused travelers of breach of contract and lack of insurance, that the pandemic and decision to close had caused direct physical loss that was eligible for coverage under its policy.
The court disagreed. "In this case, the meaning of the language" physical loss of or damage to "property in the insurance " Travelers wrote, but does not define the terms, says the decision.
The policy "Is not ambiguous", it said, however. Taking these words together according to their usual meanings means "physical loss of" property material, appreciable destruction or deprivation of process. "Physical damage to" property means significant, appreciable damage.
“In other words, the phrase refers to a concrete loss of or damage to the insured property, in whole or in part. As a trigger for coverage, this policy language excludes economic or monetary losses for the new coronavirus, SARS-CoV-2, causing this dispute for the simple reason that the virus did not damage the labeled properties even though (interpreting the allegations in the plaintiff's favor), the virus can be found on surfaces there ”, was mentioned in the decision when he agreed to dismiss the case. comment.
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