Virus Exclusion Bars Coverage for Retail Chain’s COVID-19 Losses, Zurich Contends

CHICAGO — Zurich American Insurance Co. has moved to dismiss a lawsuit seeking COVID-19-related business interruption coverage for a children’s retail chain, arguing that the policy’s virus exclusion applies to losses “directly or indirectly caused by a virus.”

In a Sept. 21 motion to dismiss filed in the U.S. District Court for the Northern District of Illinois, Zurich further argues that the plaintiff, America’s Kids LLC, cannot allege “direct physical loss or damage,” as required by the policy.

As support, Zurich cites Roundabout Theatre Co. v. Contin. Cas. Co., 751 N.Y.S.2d 4 (N.Y. App. Div. 2002), in which a New …