AFM Mattress Company, LLC v. Motorists Commercial Mutual Insurance Co.

Dist. Ct. did not err in dismissing for failure to state viable cause of action, plaintiff-insured’s claim, alleging that defendant-insurance company wrongfully denied its claim for insurance benefits arising out of defendant’s policy, where plaintiff allegedly incurred business losses when it had to close its stores under government orders due to COVID-19 pandemic. Defendant's policy contained broad virus exclusion that stated that defendant would not pay for loss or damage caused by or resulting from any virus, and Dist. Ct. could properly find that said clause precluded coverage for plaintiff’s claim. While plaintiff argued that regulatory estoppel should prevent virus exclusion clause from barring plaintiff’s claim for coverage, where plaintiff alleged that defendant had misrepresented virus exclusion clause to officials at Illinois Department of Insurance, Illinois has not adopted or recognized regulatory estoppel. Ct. further rejected plaintiff’s claim that virus exclusion clause did not apply to other covered areas in policy.