By David DeMoss
In the ever evolving news surrounding COVID-related business interruption lawsuits, insurers can celebrate a win. Last week, a court ruled Zurich American Insurance Company is not responsible to pay an insured over $40 million in claimed losses. The U.S. District Court said, “Plaintiffs have failed to meet their burden.” See the below article for Jeff Weinstein’s full coverage on the news.
The Briad Group, which has more than 120 franchise locations in the United States, including Marriott and Hilton hotels, lost its US$40 million-plus COVID-19 business interruption lawsuit against its insurer, businessinsurance.com reported on Friday.
A federal district court on Wednesday dismissed without oral argument the suit brought against a Zurich Insurance Group Ltd. unit by Briad, a franchise owner of businesses that include Wendy’s, TGI Friday’s, Marriott and Hilton.
Briad Group’s attorney said in a statement, “My clients are analyzing the court’s decision and considering their options.”
The suit was filed against Zurich unit American Guaranty and Liability Insurance Co. in October, seeking US$40.8 million in losses stemming from the pandemic, according to court papers in Manhattan Partners LLC et al. v. American Guarantee & Liability Insurance Co.
The franchise owners’ policy covered direct physical loss or damage, and excluded losses arising from contamination.
The letter opinion by the U.S. District Court in Newark, New Jersey said, “Plaintiffs have failed to meet their burden” to show their claims fall within the policy’s basic terms. “The Policy unambiguously limits its coverage to physical loss of damage to Plaintiffs’ commercial property,” it said.
“Each of the coverage provisions Plaintiffs rely on specifically requires ‘direct physical loss of or damage to property’ to trigger coverage,” it states.
“Here, Plaintiffs have not alleged any facts that support a showing that their properties were physically damaged. Plaintiffs’ general statements that the COVID-19 virus was on surfaces and in the air at their properties is insufficient to show property loss or damage,” it said, dismissing the case.