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Tuesday, January 26, 2021
Two federal cases in the Northern District of Ohio recently reached very different conclusions on whether the state’s COVID-19 shutdowns of restaurants permit valid claims for business interruption insurance coverage. Reviewing essentially the same facts and policy provisions, one court found for the insurer, holding no coverage to exist. The other found for the policyholder, awarding coverage. The opposite results will no doubt lead to further upcoming appellate activity in Ohio. The reasoning in these cases may also lead to further clarifications in Ohio about the rules for interpreting insurance policies.
A.
1:20-CV-01192
In 
Santo’s case, Judge Pamela Barker dismissed the policyholder’s claims for business interruption coverage on two main grounds. First, the court found: (a) Santo’s failed to plead a threshold claim of “direct physical loss of or damage to” its insured premises, given the absence of any alleged “tangible” or “structural” damage beyond “economic losses”; and (b) even if a covered claim had been alleged, coverage was precluded by the “virus exclusion” in the coverage forms. 

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