DC Court Grants Summary Judgment to Commercial Property Insurer on COVID-19 Business Interruption Claim

* * * SPECIAL ALERT * * *

This afternoon the Superior Court of the District of Columbia granted summary judgment to Erie Insurance Exchange, dismissing plaintiffs' complaint for COVID-19-related business income/ interruption losses.

The court concluded: 

With both dictionary definitions and the weight of case law supporting Defendant’s interpretation of the term "direct physical loss," Plaintiffs’ additional arguments are unconvincing. First, Plaintiffs argue that because the insurance contract has specific exclusions for "loss of use" under some coverage lines but not for Income Protection coverage, the Court should infer that the Income Protection coverage covers losses such as Plaintiffs’. Plaintiffs' Motion at 13-14. But as already discussed, even if “loss of use” was covered, Plaintiffs would still have to show that the loss of use was a "direct physical loss” similar to those in the cases discussed supra at 5-7. And for the reasons explained in this order, there was no “direct physical loss” to Plaintiffs.  Second, Plaintiffs argue that, unlike some similar insurance policies, their policies do not include a specific exclusion for pandemic-related losses. Id. at 19-20. But again, even in the absence of such an exclusion, Plaintiffs would still be required to show a 'direct physical loss.' Because they cannot do so, the Court grants summary judgment to Defendant.

The case is Rose's 1, LLC et al. v. Erie Insurance Exchange and you can read the court's decision and order by clicking here.