Microorganism Exclusion Found to Preclude Coverage for Business Shut Down by COVID-19 Pandemic Closure Order

 

In the case of Big Red Management Corp. v. Zurich Amer. Ins. Co., No. 2:20-CV-02113-KSM (Jan. 7, 2022 Marston, J.), the court ruled that a restaurant was not entitled to coverage for business losses allegedly caused by COVID-19 governmental closure orders where the insurance policy in question contained a microorganism exclusion.

The court also noted that coverage was properly denied by the carrier in that there had been no evidence of any direct physical damage or loss to the insured’s property. The court additionally held that coverage was properly denied because the governmental closure orders did not completely prohibit access to the restaurant since the restaurant was permitted to continue to offer takeout and delivery services.

As such, the court granted the Defendant’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 3, 2022).