In a recent decision from the United States District Court in the Northern District of Ohio, Judge Polster found that pursuant to the terms and conditions of a Commercial Business Policy, coverage existed for losses sustained by the restaurants as a result of government ordered shutdowns arising out of the COVID-19 pandemic.

The Henderson Road Restaurant Systems and a slew of related companies that operated restaurants in Ohio, Michigan, Florida, Indiana and Pennsylvania, sustained losses suffered due to COVID-19 shutdown orders.

As a result of the shutdown orders, the restaurants submitted claims to their insurance carrier for business income coverage. The insurance carrier denied the claim, arguing that tangible structural damage to the restaurants was necessary to satisfy the policy’s threshold requirement that business income losses be tied to ‘direct physical loss of or damage to’ property.

This denial of coverage is consistent with decisions of other insurance companies nationwide and, a vast majority of the courts nationwide interpreting this policy language.