COVID-19 Business Interruption Suit Can Proceed, Cook County Judge Rules

August 27, 2021

Cook County Circuit Court Judge Raymond W. Mitchell denied a motion to dismiss in a bellwether case determining whether the presence of coronavirus causes “physical loss or damage” for insurance purposes.

JDS Construction Group LLC, a New York company, filed suit against Chicago-based insurer, Continental Casualty (“Continental”), over the losses from the shutdown of a condominium tower project in New York City. The project was required to shut down for a period of time in 2020 due to a state executive order issued by then-New York Governor Andrew Cuomo, halting non-essential work at the beginning of the pandemic.

The plaintiffs carried builders’ risk insurance through Continental. Their complaint contained eight counts, including breach of contract, and sought declaratory judgments of insurance coverage. Judge Mitchell denied the Continental’s motion to dismiss the complaint, moving the case forward toward trial.

The issue of whether COVID-19 causes physical loss or damage is generally not defined in insurance policies and is being litigated throughout the country. The novel issue will set a precedent for future rulings, and while not mandatory in all jurisdictions, could be persuasive as courts grapple with the impacts of COVID-19. As the case moves forward, many industries will be watching how the effect of COVID-19 is treated in the judiciary.

For assistance in navigating insurance claims resulting from the COVID-19 pandemic, please contact the attorneys at Rock Fusco & Connelly, LLC.

 

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