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Another Chicago tavern sued Society Insurance Inc. for corona-virus-related business interruption coverage on Wednesday.
The Fond du Lac, Wisconsin-based mutual is already subject to a suit filed by a group of a dozen restaurants and movie theaters and a separate suit filed by the Billy Goat Tavern. The policyholders in the three suits say that Society does not include a virus exclusion in its policies.
In the latest suit, Maillard Tavern LLC v. Society Insurance Inc., which was filed in state court in Chicago, the policyholder asserts that the government-ordered shutdown of its business and the presence of the virus on its property trigger coverage under its business interruption coverage.
“The presence of people infected with or carrying COVID-19 particles renders physical property in their vicinity unsafe and unusable, resulting in direct physical loss to that property,” the suit states.
The policy includes coverage “provided there is some kind of civil authority shutdown, just like we are experiencing right now,” said Antonio Romanucci, founding partner at Romanucci & Blandin LLC in Chicago, who represents Maillard Tavern.
Society declined to comment on the lawsuit.
The case is one of numerous cases around the country in which commercial policyholders are seeking declaratory rulings that their business interruption policies cover coronavirus-related losses. Insurer groups argue that the pandemic does not constitute physical damage and is not covered under most policies.
Bob Rutter, a partner at Rutter & Russin LLC in Cleveland, who is involved in the Maillard Tavern case and several cases filed in Ohio, noted that the standard Insurance Services Offices Inc. virus exclusion has been available to insurers for more than 10 years. “Presumably, they put in a virus exclusion because they recognized that otherwise a virus would be a covered loss and would have the potential to cause physical loss or damage,” he said.
In addition, while the policyholders argue that the presence of the virus constitutes physical damage, the phrase “loss or damage” widens the trigger, Mr. Rutter said.
“Presumably, they use two different words because they mean two different things. So, loss must mean something different to damage,” he said. For example, odors or airborne contaminants could cause a loss of use or another direct loss that is not the same as physical damage, Mr. Rutter said.
More insurance and risk management news on the coronavirus crisis here.