Dist. Ct. did not err in dismissing plaintiff-insured’s action for failure to state viable claim under Indiana law, where plaintiff alleged that defendant-insurance company wrongfully denied plaintiff benefits for loss of business income arising out of State of Indiana’s issuance of COVID-19 restrictions that greatly impacted its hotel business. Dist. Ct. could properly find that denial of benefits was consistent with language of policy that required that plaintiff establish that it incurred “direct physical loss or damages,” and that plaintiff’s allegations did not establish a direct physical loss or damages arising out of COVID-19 virus. Ct. rejected plaintiff’s claim that its allegation that virus particles had attached to hotel property was sufficient to qualify as direct physical loss or damage. Ct. further noted that plaintiff’s hotel had status as essential business during pandemic that allowed it to remain open to provide lodging and carryout food service. As such, COVID-19 restrictions did not render hotel completely uninhabitable.
Federal 7th Circuit Court
Civil Court
Insurance