Two federal appeals courts have issued additional rulings against policyholders in COVID-19-related business interruption cases, with both citing earlier decisions.

Friday’s rulings were issued by the 11th U.S. Circuit Court of Appeals in Atlanta in Town Kitchen LLC v. Certain Underwriters at Lloyd’s, London et. al and by the 7th U.S. Circuit Court of Appeals in Chicago in Green Beginnings, LLC v. West Bend Mutual Insurance Co.

The 11th Circuit affirmed a ruling by the U.S. District Court in Miami in the litigation, which was filed by a Miami restaurant. In its ruling denying coverage, a three-judge appeals court panel cited the court’s earlier decision in SA Palm Beach LLC v. Certain Underwriters at Lloyd’s, London, et. al and a Florida state appeals court ruling in Commodore, Inc. v. Certain Underwriters at Lloyd’s.

Town Kitchen “failed to plead that its losses and expenses are covered” under its policy, the ruling said. “Nor could it correct that deficiency upon repleading, given the holdings in SE Palm and Commodore,” the ruling said.

Policyholder attorney Jason S. Mazer, a shareholder with Cimo Mazer Mark PLLC in Miami, said in a statement he is disappointed by the decision.  

“Whether the virus that causes COVID-19 can cause ‘physical loss of or damage to’ property because it renders a business unsafe for human occupancy under an ‘all-risk’ policy without a virus exclusion has never been decided by the Florida Supreme Court,” he said. 

“It is no different from other harmful substances, like gas fumes, noxious odors, ammonia, asbestos etc., that many courts have found to trigger coverage even though they do not cause structural damage and can be cleaned. “

The statement also said that “whether the virus that causes COVID-19 tangibly alters property by poisoning the air within a building should not have been resolved by a federal court on a motion to dismiss.”

The 7th Circuit cited its earlier rulings in Sandy Point Dental, P.C. v. Cincinnati Insurance Co. and Paradigm Care & Enrichment Center LLC v. West Bend Mutual Insurance Co. in affirming a ruling by the U.S. District Court in Milwaukee in ruling against a Chicago childcare facility.

In Sandy Point, “we found that COVID-19 has a negligible impact on physical property, as ‘it may be wiped off surfaces using ordinary cleaning materials, and it disintegrates on its own in a matter of days,’ leaving property physically unchanged,” the three-page ruling said.

Attorneys in the case had no comment or did not respond to a request for comment.

On Wednesday, the Wisconsin Supreme Court became the third state high court to rule against policyholders in COVID-19 business interruption litigation.