If you have been following the insurance coverage cases involving claims for economic losses due to COVID-related business shut-downs filed throughout the United States, you know that many courts have concluded that insurance policies don’t provide coverage for these losses. In most cases where coverage is not found, courts have concluded that the business shut-downs were not caused by a “direct physical loss or damage to property” or have found there to be virus-related exclusions that bar coverage. But there are other courts that have reached the opposite conclusion, finding that coverage does indeed apply to afford coverage to insureds that have suffered severe economic loss caused by the shutdown.
Opinions issued by federal judges here in Ohio who have been asked to weigh in on coverage under Ohio law have reflected the “mixed bag” of results in dealing with this issue. A number of judges have followed the majority of courts in declining coverage. One federal judge has unequivocally ruled the other way, finding that based upon the language of the policy at issues in that case, the loss was covered under Ohio law. Another federal judge asked the 6th Circuit Court of Appeals to weigh in before making a decision. And, finally, another federal judge asked the Ohio Supreme Court to answer the question though the Court’s “certified question” process, believing that there is insufficient Ohio precedent to guide it.
Well, the Ohio Supreme Court has decided to enter the fray, accepting the federal court’s certified question (though notably three of the seven justices dissented from taking the question). Specifically, the Court will answer the following question: “Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARSCoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at that premises?” The Court’s agreement to answer this question will have a huge impact on the continued litigation of these claims, either virtually eliminating them all together or creating a basis for thousands of claims worth hundreds of millions of dollars.
Briefing on the issue has been scheduled and oral argument is likely to take place in late summer or early fall. We will keep an eye on this case as it proceeds and report on any significant developments.