Federal Judge Dismisses COVID-19 Coverage Suit

CSK Partner, Mark D. Tinker, represented Southern-Owners, insurer for a Beef O’Brady’s restaurant, in a COVID-19 coverage suit which was dismissed by a Florida federal judge. The court ruled that its premises did not suffer direct physical damage by government-ordered closures and, as a result, its insurer does not have to cover the restaurant’s losses. U.S. District Judge M. Casey Rodgers on granted Southern-Owners Insurance Co.’s request to dismiss the suit by TL Goodson LLC, which owns and operates a Beef O’Brady’s in Escambia County, Florida, and sought to recoup income lost from March to May 2020, when restaurants and other businesses were ordered shut to curb the spread of the coronavirus.

The judge relied on the Eleventh Circuit’s 2020 ruling in Mama Jo’s v. Sparta Insurance, in which the court held that a Miami restaurant’s lost income and extra cleaning costs as a result of nearby roadwork were not covered. Judge Rodgers added that there are plenty of decisions in Florida and elsewhere that have “almost uniformly held” that economic losses from state and local government orders closing businesses to slow the spread of COVID-19  are not covered under all-risk policy language like that in this case because they are not caused by direct physical loss or damage to the insured property. The judge noted that both the Eleventh Circuit and Florida courts have held that extra cleaning required by road dust or a virus is not a loss that is both direct and physical, as required for coverage under this policy and others like it. “The instant case presents a comparable situation in that there is no allegation of physical property damage other than the presence of virus, which merely required cleaning,” Judge Rodgers said in her ruling.

Mark D. Tinker
(813) 509-2613

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