Fitness company’s COVID-19 lawsuit against Zurich may continue

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Citing state law, a Minneapolis state court on Thursday refused to dismiss the COVID-19 lawsuit filed by a fitness and recreational sports company against a unit of the Zurich Insurance Group as part of the risk coverage for its manufacturer.

Life Time Inc., based in Chanhassen, Minnesota, which had 19 separate construction projects underway in various parts of Hennepin County, Minnesota as of March 2020, had a builder’s risk insurance policy issued by Zurich American Insurance Co., according to the Hennepin County Court ruling Thursday. in Minneapolis in Lifetime, Inc. and. Al. C. Zurich American Insurance Co.

The policy provided coverage for “direct physical loss or damage to” covered property and had a limit of $ 100 million per occurrence for each project it covered.

The ruling said that although Zurich “correctly notes” the vast majority of cases have denied coverage filed by companies forced to shut down due to the pandemic, the interpretation of an insurance contract is one of the laws. state and “the court is not bound by these other court decisions but must look to Minnesota law.

While the laws of other states “take a narrow view of what direct physical damage is… the Minnesota cases are broader and allow the claim as a plea to proceed,” the ruling said.

Judge Kristin A. Siegesmund said she was not convinced by the insurer’s favorable ruling from the U.S. 8th Court of Appeals in St. Louis in Oral surgeons, PC c. Cincinnati Insurance Co., whose jurisdiction includes Minnesota, which she said applies Iowa law.

In declining to dismiss the lawsuit, the ruling said the plaintiffs have pleaded facts that “the insured property is damaged in some way” which, if proven, “could support a claim for direct physical loss “under the manufacturer’s risk policy.

Lawyers in the case made no comment or responded to a request for comment.

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