The earliest COVID-19 insurance court rulings across the country were decided under a preliminary “motion to dismiss” standard – meaning, the courts were deciding whether the insured had a plausible claim for relief against the insurer if the insured’s allegations could be proven true, not that the insured was, in fact, entitled to coverage. In Missouri, the federal courts handed down at least three such initial rulings in favor of policyholders, finding the claims of a hair salon, a dental office and a restaurant/bar were adequately stated and could proceed. Now, however, a Missouri state court judge has taken things a step further and decided, on the merits, that a restaurant was in fact entitled to coverage for its COVID-19 business interruption losses. In Ja-Del, Inc. v. Zurich American Ins. Co., the Missouri court concluded that Zurich’s policy language was ambiguous and that Zurich was on the hook for coverage, where Jack Stack Barbecue’s operator, Ja-Del, Inc., argued that COVID-19 droplets attach to covered physical property and then infect people when touched, thus satisfying the policy’s “direct physical loss” requirement. It also argued that Zurich’s microorganisms exclusion did not apply to viruses like COVID-19.
While the rulings out of Missouri have not been unanimously decided in favor of policyholders (some of whom did not allege COVID-19 on their premises and/or whose policies may have had other, more problematic exclusions), it is definitely a jurisdiction that stands out as being relatively policyholder-friendly. Other jurisdictions logging summary judgment wins for policyholders include North Carolina, Washington, Pennsylvania, Oklahoma and Ohio.