The Ohio Supreme Court has held that a business’s insurance policy does not cover losses it had incurred after being forced to restrict operations during the start of the COVID-19 pandemic in 2020.
On a 5-1 vote, the court ruled that Cincinnati Insurance Company was not compelled to cover the losses of Neuro-Communication Services, an audiology practice operator, because the coronavirus did not cause any direct physical damage or loss to the practice.
The business operator maintained that it had suffered a direct physical loss or damage to property, as defined by its “all-risk” commercial insurance policy. But, in her decision, Justice Jennifer Brunner sided with the insurer saying that the term “loss” under the policy would require that the business operator’s property sustain actual physical damage, which the presence of the virus did not cause.
“Such loss or damage does not include a loss of the ability to use covered property for business purposes,” wrote Brunner.
The judge also outlined that Neuro’s premises were never completely uninhabitable, but were instead rendered unsafe as they were an indoor space for gathering, in light of Ohio Governor Mike DeWine’s mandated business shutdowns in March 2020.
Reuters reported that the lawyer representing Neuro said in a statement that he was disappointed with the ruling, and had believed that the policy – at minimum – was ambiguous.
The Ohio Supreme Court is the latest to join other state high courts – namely, Iowa, Massachusetts, Oklahoma, South Carolina, Washington, and Wisconsin – in ruling in favor of insurers in COVID business loss lawsuits, said Reuters.
This is also not the first time Cincinnati Insurance Company has won a lawsuit over pandemic losses. In 2021, the 11th US Circuit Court of Appeals held that the insurer was not required to pay a Georgia dental practice’s business income losses. Like the latest lawsuit, the losses in question were sustained during the state-mandated shelter-in-place order and federal guidance to postpone routine and elective medical procedures at the onset of the pandemic.
