On November 4, 2020, East End Trial Group filed an amicus brief in the District of Columbia Court of Appeals on behalf of its clients, Thirst Group Corp. and the American Craft Spirits Association.
The case concerns Erie Insurance’s failure to cover losses incurred by more than a dozen D.C. restaurants as a result of COVID-19 and government shutdown orders combating the virus’s spread.
Our clients argue the restaurants’ “all risk” insurance policies broadly cover loss resulting from any kind of direct “physical loss” to “Covered Property” unless expressly excluded from coverage by narrowly-applied exclusions. Because the policies do not directly exclude losses caused by or resulting from virus-related events, the restaurants are covered for their losses.
Erie Insurance suggests the restaurants have experienced no physical impact, falsely arguing that “direct physical loss” means structural damage, requiring a structural alteration, without which the restaurants are not entitled coverage.
However, our clients argue that COVID-19 is not intangible. It is physical, ubiquitous, and evolving. It requires restaurants to implement physical responses to combat its spread, not unlike efforts used to combat the effects of other forces of nature, like boarding up windows before a storm. COVID-19 and related government shutdown orders triggered these responses and caused restaurants across the country to suffer the direct physical loss of their bars and restaurants, resulting in a significant loss of business income and incurring additional necessary expenses. This is the exact type of business interruption covered in the restaurants’ “all risk” insurance policies.
Check back for more information after the Court of Appeals issues a decision.