EAST ST. LOUIS – Belleville’s 4202 Main Street Brewing Company can’t recover lockdown losses from general liability carrier Cincinnati Insurance, U.S. District Judge David Dugan ruled on Jan. 25.
“Mere loss of use or diminishment of value of plaintiff’s business without underlying tangible damage or loss to the business’s property or structure is not enough to trigger coverage under the policy,” Dugan wrote.
The restaurant sued Cincinnati in August, seeking declaratory judgment on coverage and alleging breach of contract and fraud.
Cincinnati moved to dismiss the suit in October.
Dugan held a hearing Jan. 12, and issued a decision in 13 days.
He found the policy provided coverage for direct physical loss at the premises resulting from any covered cause of loss and that the policy defined covered cause of loss as risks of direct physical loss unless the loss was otherwise excluded or limited.
He further found Cincinnati maintained that the language required some form of actual tangible, material loss or demonstrable physical alteration.
He found the restaurant asserted that the language contemplated losses from reduction in usefulness, value, or life span.
He also found the restaurant contended that physical loss didn’t require material alteration to a physical structure.
“In sum, plaintiff argues that the policy language provides coverage for its income losses because the losses resulted from a reduction in the value of plaintiff’s business caused by a tangible and material substance which can attach to its physical property, regardless of whether that substance can cause damage to the property itself,” Dugan wrote.
He found the restaurant alleged that the presence of the virus in or around the business prevented it from operating.
He found that even in construing the allegation in the restaurant’s favor, it wasn’t enough to infer that the virus was directly present on the property or its surfaces.
“This action is dismissed in its entirety and the case is closed,” Dugan wrote.
Attorneys Brian Reid and Lawrence Tooth of Chicago represented Cincinnati Insurance.
Attorneys Eric Johnson, Michael Stewart, Jason Barnes, and Ted Gianaris, all of John Simmons’s firm in Alton, represented 4202 Main Street Brewing Company.