Insurance Law

Plaintiff insurance company filed a declaratory judgment action seeking a finding that it had properly denied defendant’s request for an appraisal when its insured had sought to use the appraisal provision of the applicable insurance policy to resolve a dispute. The trial court dismissed the insurance company’s complaint on defendant’s motion. The appellate court affirmed, finding that a declaratory judgment action is not the proper vehicle to review past conduct and that the insurance company should have filed a declaratory judgment action seeking guidance on whether the appraisal process applied to the situation prior to denying the request. (HAUPTMAN and McDADE, concurring)

Plaintiff, an owner and operator of medical imaging clinics in Illinois and Indiana, filed a declaratory judgment seeking a finding that its losses due to the Covid-19 pandemic were covered by its property insurance. The trial court dismissed plaintiff’s complaint, concluding that the unambiguous terms of the policy did not cover plaintiff’s losses and plaintiff appealed. The appellate court affirmed, finding that losses due to the pandemic were not covered losses because they were not “physical” losses or damages as was required by the language of the policy. (GORDON and BURKE, concurring)

Plaintiff restaurant brought a declaratory judgment action seeking a finding that its business losses due to the Covid-19 pandemic were covered under the “contamination” provision of its commercial property insurance policy. The trial court entered judgment for plaintiff on the coverage claim and subsequently granted plaintiff’s motion for class certification. Defendant appealed the order granting the class certification pursuant to SCR 306(a)(8). The appellate court first examined whether plaintiff stated a valid cause of action as a “threshold” consideration in reviewing the propriety of the class certification order and found that plaintiff’s failure to allege the presence of the virus in its products, merchandise, or premises defeated its claim for coverage under the policy’s contamination provision. The appellate court reversed the trial court order granting class certification and remanded for further proceedings consistent with the opinion. (HUTCHINSON and BIRKETT, concurring)

Plaintiff, a restaurant, sought declaratory judgment individually and on behalf of similarly situated individuals that business interruption due to the Covid-19 pandemic was a “covered cause of loss” under a business-owners policy issued by defendant State Farm. The trial court dismissed plaintiff’s complaint pursuant to section 2-615, including claims for breach of contract and bad faith. The appellate court affirmed, finding that the losses experienced by the plaintiff constituted an economic loss and not a physical loss, as was required by the language of the policy to trigger coverage. The appellate court further found that a virus exclusion clause within the policy provided additional grounds to find that the declaratory judgment was properly dismissed. (HYMAN and WALKER, concurring)

Matter arising from an insurance coverage dispute. The plaintiff appealed from the circuit court order granting summary judgment in favor of the defendant insurance company and finding no duty to defend or indemnify. The Circuit court also barred a witness offered by plaintiff from testifying as an expert regarding insurance policy interpretation. The appellate court affirmed, finding that the underlying complaint did not allege “property damage” as it was defined by the policy. The appellate court further held that the trial court did not err in barring the expert witness testimony because the interpretation of an insurance policy is a question of law and, absent ambiguity, expert testimony is not appropriate. (BOIE and VAUGHAN, concurring)

Plaintiff appealed from trial court judgment finding commercial property insurance policy did not cover business income losses suffered as a result of the Covid-19 pandemic and state executive orders that restricted in-person dining. Appellate court affirmed, finding that the virus and executive orders did not constitute “direct physical loss of or damage” to the plaintiff’s property, which was required by the policy. (BRENNAN, concurring and McLAREN, specially concurring)