Insurers win state appeals rulings in COVID-related cases

Two state Michigan appeals courts have ruled against policyholders in COVID-19-related business interruption litigation.

Both decisions, which were issued last Thursday, cited the Michigan Court of Appeals’ ruling in Gavrilides Management Co. LLC v. Michigan Insurance Co.

The state appeals court in Lansing ruled against three restaurants operating in Wayne County, Michigan, in affirming a lower court ruling in favor of Lansing-based Property–Owners Insurance Co., according to the decision in Three Won Three, Corp., Eight Ate, LLC and Ate Ate, LLC v. Property-Owners Insurance Co.

The ruling said a claim for coverage “is effectively foreclosed by Gavrilides’s conclusion that the kind of losses caused by the virus that plaintiffs alleged – the cost of cleaning surfaces – did not constitute damage or loss under the policy.

“In any event…the policy’s virus exclusion expressly bars coverage for damage or loss caused by viruses,” the ruling said.

The Michigan appeals court in Detroit ruled against a spa and salon, Massage Bliss Inc., in Meridian Charter Township, Michigan, in affirming a lower court decision in favor of Lansing-based Farm Bureau General Insurance Co. of Michigan in Massage Bliss, Inc. v. Farm Bureau General Insurance Co. of Michigan.

The court ruled there was no direct loss of property. “There was no allegation or indication that plaintiff was actually deprived or dispossessed of the property,” the ruling said.

The plaintiff, along with many Michigan businesses, was “merely limited or restricted in these of property; there was no direct physical loss of the property,” the decision said.

Attorneys in the case had no comment, did not respond to requests for comment or could not be reached.

On Friday, two Chicago state appeals courts ruled in favor of a Zurich Insurance Group Ltd. unit in COVID-19-related business interruption litigation filed by restaurant and hotel chains.