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United States: No loss of business income, no exclusion of microorganisms – Count Basie Theater Inc. v. Zürich
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Loss of business income / Covid-19; Exclusion of microorganisms
Count Basie Theater Inc. v. Zurich American Insurance Co.no. 21-615, 2021 WL 5980344 (DNJ 17 Dec. 2021)
In Count Basie Theater Inc. v. Zürich, the district court granted Zurich’s partial motion to dismiss, finding that there was no coverage for the plaintiff’s lost business income resulting from the COVID-19 pandemic. In reaching this decision, the court declined to determine whether the presence of the virus that causes COVID-19 constitutes direct physical loss or damage to insured property. Instead, the court held that the policy’s exclusion of the microorganisms prevented the plaintiff’s recovery. The court rejected the plaintiff’s argument that the exclusion was ambiguous because a virus is not a microorganism, finding the argument irrelevant because the term microorganism was specifically defined in the policy for include viruses.
In an earlier decision, the district court also denied plaintiff’s request for dismissal, finding that neither colorado river abstention nor Brillhart applicable forbearance. To see Count Basie Theater Inc. v. Zurich Am. Ins. Co.no. 21-615, 2021 WL 3732903 (DNJ 24 August 2021).
Zurich American Insurance Company is represented by Philip C. Silverberg, William D. Wilson and Craig R. Rygiel.
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