Ohio Superior Court Skeptical of Insurance Coverage for COVID-Related Business Losses

Window display of a sporting goods store in downtown Cincinnati, Ohio. Aaron Doster – USA TODAY Sports

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  • Ohio Supreme Court assesses whether coverage is available through commercial property insurance
  • The insurance industry has defeated hundreds of similar cases nationwide

(Reuters) – Judges of Ohio’s highest court expressed skepticism on Tuesday that commercial property insurance policies cover any losses suffered by businesses due to the disruptions caused by the COVID-19 pandemic. 19.

In the third such case to reach a state’s highest court, the Supreme Court of Ohio seemed likely to join a majority of the nation’s mostly federal courts in dismissing hundreds of insurance claims. businesses amid the pandemic.

As an attorney for an audiology service provider who filed a proposed class action lawsuit against Cincinnati Insurance Co argued that the virus could cause property damage entitling businesses to coverage, judges questioned this premise.

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“I have a hard time understanding how you define this as physical harm,” Judge Sharon Kennedy said.

While insurance policies are governed by state law, the insurance industry’s victories against claims in similar cases have largely come in federal courts. Only two other state supreme courts, in Massachusetts and Vermont, have considered the issue.

The Ohio Supreme Court heard the case at the request of U.S. District Judge Benita Pearson, the federal judge presiding over Neuro-Communication Services Inc’s trial, who said it raises an important legal issue. state that judges should have the opportunity to address.

Nicholas DiCello, neuro-communications services attorney at Spangenberg Shibley & Liber, said the coronavirus is no different from other invisible, odorless gases or agents like carbon monoxide or radon that can trigger damage claims. materials.

DiCello told the court that a long line of pre-pandemic cases supported coverage of incidents when these gases or agents rendered a business inoperable and argued that coronavirus particles can just as easily damage a property when someone issues them.

“They are physical particles that have a physical manifestation,” he said. “They can be measured. They can be calculated.”

“They can also be wiped down, as evidenced by what happened before this podium was used,” Chief Justice Maureen O’Connor retorted, noting that a court worker had cleaned the podium DiCello was talking about. shortly before his argument.

Some of the six other members of the court, including Kennedy and Judge Patrick DeWine, seized on this analogy to press DiCello about how a company could sustain any physical damage from the virus that would warrant coverage.

“It still exists,” Kennedy said of the podium. “You erase him, he still exists. He wasn’t marked, he wasn’t injured.”

Neuro-Communication argued that it was wronged by being forced at the start of the pandemic to close on the orders of Ohio Governor Mike DeWine, a Republican who is the father of Judge DeWine, to slow the spread of the virus. .

But Daniel Litchfield, a Cincinnati Insurance attorney at Litchfield Cavo, argued that the government shutdown did not mean Neuro-Communication could recoup its losses through property insurance.

“Most of the government orders that I know of as a businessman cost companies money,” he said. “It’s part of the cost of doing business in a regulated or partially regulated economy.”

He said only a suspension of activities caused by physical damage, such as fire, could qualify an insured for coverage.

“We shouldn’t ignore the word ‘physical,'” he said.

The case is Neuro-Communication Services Inc. v. The Cincinnati Insurance Co, Ohio Supreme Court, No. 2021-0130.

For Neuro-Communication Services: Nicholas DiCello of Spangenberg Shibley & Liber

For Cincinnati Insurance: Daniel Litchfield of Litchfield Cavo

(Note: This story has been updated to correct the number of state supreme courts that have heard similar cases.)

Read more:

Massachusetts’ highest court assesses insurance coverage for COVID-related business losses

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Nathalie Raymond

Nate Raymond reports on federal judiciary and litigation. He can be reached at [email protected]

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