Federal appeals court rules against COVID coverage claims

In a series of rulings issued Wednesday, the 6th U.S. Circuit Court of Appeals in Cincinnati ruled various Ohio businesses were not owed coverage for losses of income during the COVID-19 lockdowns.

The appeals court said it had held back ruling on the case while waiting for the Ohio Supreme Court to rule on a similar case. That state high court ruling – Neuro-Communication Services Inc. v. Cincinnati Insurance Co. et al – came down earlier this month with the court ruling that business interruption coverage was not triggered because the business had not suffered a physical loss.

In Brunswick Panini’s LLC v. Zurich American Insurance Co., the 6th Circuit ruled that, under the high court’s analysis, the restaurants bringing the case “have not adequately alleged the required ‘direct physical loss of or damage to’ their restaurants or to nearby properties simply from their loss of use.”

The appeals court issued similar rulings in Equity Planning Corp. v. Westfield Insurance Co.; Ceres Enterprises LLC v. Travelers Indemnity Co. of America; Family Tacos LLC v. Auto-Owners Insurance Co.; and Mikmar Inc. v. Westfield Insurance Co.

Thousands of businesses sued their insurers seeking business interruption coverage after they were forced to close or restrict operations during the COVID-19 lockdowns in 2020. Most of the rulings so far have been in favor of insurers.