(Article from Insurance Law Alert, December 2021)
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An Indiana state court granted an insurer’s summary judgment motion, ruling that expert testimony offered by the policyholder failed to raise a triable issue of fact as to the availability of business interruption coverage for COVID-19-related losses. Indiana Repertory Theatre, Inc. v. Cincinnati Cas. Co., No. 49D01-2004-PL-013137 (Ind. Super. Ct. Dec. 13, 2021).
The policyholder alleged that the virus was present at its theater and therefore contaminated and “physically altered or damaged” the air and property at the premises. In support of this allegation, the policyholder’s expert provided statistical modeling indicating that for an average audience of attendees, an average of 2.2 individuals would be infected with COVID-19.
The court ruled that the expert’s statistical modeling raised a genuine issue of material fact as to the presence of the virus at the insured premises, rejecting the insurer’s contention that the evidence was based on “speculation” and “guesswork.” However, the court nonetheless ruled that coverage was unavailable based on its finding that the virus is not capable of physically altering or damaging property. The court emphasized that the virus can be removed by cleaning and that it dies over time, stating that under the policyholder’s argument, “any time an undesirable substance or thing were to enter a room, no matter how fleetingly, property insurance could be implicated. That is an unreasonable and boundless extension of property insurance.”