Why Elections Are Important: Ohio Supreme Court Could Require Insurance Coverage for COVID-19 Business Losses

The Ohio Supreme Court is currently deliberating a case on whether the COVID-19 virus constitutes direct physical loss and requires a commercial insurance policy to cover business interruption losses.   

Earlier this year, the Ohio Supreme Court granted certification of the legal question: “Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV—2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-l9 constitute direct physical loss or damage to property at that premises?”  

The four conservative justices on the court certified the question to hear the case. The significance of this is that it likely means that the justices who have a precedent for interpreting the law based upon the strict reading of the contract would likely be those who are deciding this case.   

The plaintiff, Neuro-Communication Services, bought an “all-risk” insurance policy from the defendant, Cincinnati Insurance. The policy covered “direct loss” at the premises due to a “Covered Cause of Loss.” “Loss,” in turn, was defined as “accidental physical loss or accidental physical damage.” The policy did not include a virus exclusion.  

Neuro-Communications stopped operations between late March and early May 2020, leading to significant financial losses. The company submitted a claim to its insurer based on those losses. Cincinnati Insurance, however, denied the claim saying that “[t]he claim does not involve direct, physical loss at your premises.” Neuro-Communications ultimately filed a lawsuit, contesting Cincinnati Insurance’s denial.  

A ruling is likely to be issued before the end of the year.   

We bring this up to express the importance of the upcoming election of the Ohio Supreme Court this November. OIA PAC has a track record of supporting judicial candidates who practice judicial restraint and strict constructionism, focusing their legal opinion on the constitutionality of Ohio’s laws and deferring policy matters to the legislature. These races are of the utmost importance to independent agents as the philosophical makeup of the Court is in jeopardy this election.  

Justices Pat Fischer and Pat DeWine are running to retain their seats on the Court and Justice Sharon Kennedy is running for the highest position on the court, chief justice. We encourage you to learn more about these races and the importance of the Ohio Supreme Court to you, your clients, and the future of the insurance marketplace. 

If you have any questions or concerns, please contact Lauren Reid at lauren@ohioinsuranceagents.com.

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