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Florida appeals court rules in insurer’s favor in COVID case

Posted On: May. 12, 2022 1:23 PM CST


A Florida state appeals court Wednesday ruled in favor of Lloyd’s of London in a COVID-19 business interruption litigation filed by a restaurant and bar.

Commodore Inc., which conducts business as GreenStreet Café Inc., a Coconut Grove, Florida, restaurant and bar, filed suit against Lloyd’s in state court for businesses income losses it suffered when it suspended its operations during the COVID-19 pandemic, according to the ruling by Florida’s 3rd District Court of Appeal in University Park in  Commodore, Inc. d/b/a GreenStreet Café, Inc. v. Certain Underwriters at Lloyd’s London, etc., et al.

The trial court dismissed the case, and was affirmed by the appeals court, in what is apparently the first Florida state appeals court ruling on the issue.

The all-risks commercial property policy issued by Lloyd's to GreenStreet covers direct physical loss or damage, the ruling said.  “Under this Court’s case law and the plain language of the Policy, loss of intended use alone does not constitute ‘direct physical loss.’

“Instead, ‘direct physical loss of or damage to property’ requires actual, tangible alteration to the insured property for coverage to be triggered under the Policy,” the three-judge panel’s ruling says.

“GreenStreet’s allegation that it suffered economic losses due to the City of Miami and Miami-Dade Court closure orders does not satisfy this requirement,” it said.

A footnote to the ruling states, “By our decision, we do not mean to say that virus particles could never result in a tangible alteration to property, only that this is not the case here.”

Attorneys in the case did not respond to requests for comment.

Last week, the 11th U.S. Circuit Court of Appeals in Atlanta upheld dismissal of four separate Florida COVID-19 related business interruption cases filed by three restaurants and a furniture chain against several insurers, including Lloyd’s, in a joint opinion.