ZURICH AMERICAN INSURANCE COMPANY and INTERSTATE FIRE & CASUALTY CO., Case No. 2021-02974
In the first Commonwealth of Virginia COVID-19 ruling, Mound Cotton secured a victory on behalf of its client, Zurich American Insurance Company in Crescent Hotels & Resorts, LLC v. Zurich Am. Ins. Co., No. 2021-02974 (Va. Fairfax Cnty. Aug. 18, 2021). The court sustained the insurers' demurrers to the Complaint with prejudice, concluding, on the record, that the phrase "direct physical loss or damage" is not ambiguous and "does not reach the circumstances that we have here where there's a presence of virus." The court also held that the contamination exclusion, which defined "contamination" as including "virus," precluded coverage for the hotel's COVID-19 business income loss. Finally, the court rejected plaintiff's argument that, if a virus can never cause direct physical loss or damage, there would be no need to include a virus/contamination exclusion. The court disagreed that "having a belt-and-suspenders approach somehow renders other portions of the contract not to have meaning."
Zurich American Insurance Company was represented by Partners Philip Silverberg and Hilary Henkind.
A copy of the Order can be obtained here and a copy of the Transcript can be obtained here.
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