The ruling allows these cases to move forward in court.
Dozens of businesses have sued Society, a popular insurer for the hospitality industry in the Midwest, for its refusal to cover coronavirus-related business interruption claims.
Last August, all the cases against the insurer were consolidated in a multidistrict litigation before Judge Edmond Chang. He selected three bellwether cases — those filed by Chicago-based Valley Lodge Tavern and Big Onion Tavern Group, and Wisconsin-based Rising Dough — to represent the group. His ruling against Society applies to all the cases before his court.
The insurer told the Chicago Tribune that it was disappointed with the ruling and is exploring its options. “This is an early, preliminary ruling, and does not resolve the merits,” it said in an emailed statement. “Society will continue to vigorously defend its interests in the litigation.”
The main point in many similar cases is whether the presence of the coronavirus and the government-mandated shutdowns to curb its transmission constitute direct physical damage or loss to property that prompts business interruptions claims. Typically, this type of coverage applies when the property is damaged by natural or man-made calamities.
Chang ruled that capacity limits and the inability of businesses to fully use their establishments could be interpreted by “a reasonable jury” as direct physical loss covered by the language of Society’s policies.
Additionally, most insurance companies offer policies with explicit virus or pandemic exclusions. Society’s policies, however, do not have such exclusions.