Business Income Loss / Covid-19; Microorganism Exclusion

Count Basie Theatre Inc. v. Zurich American Insurance Co., No. 21-615, 2021 WL 5980344 (D.N.J. Dec. 17, 2021)

In Count Basie Theatre Inc. v. Zurich, the district court granted Zurich’s partial motion to dismiss, finding no coverage for the plaintiff’s business income losses arising from the COVID-19 pandemic. In reaching this decision, the court declined to address whether the presence of the virus that causes COVID-19 constitutes direct physical loss of or damage to insured property. Instead, the court held that the policy’s microorganism exclusion bars the plaintiff’s recovery. The court rejected the plaintiff’s argument that the exclusion was ambiguous because a virus is not a microorganism, finding the argument irrelevant because the term microorganism was specifically defined in the policy to include viruses.

In an earlier decision, the district court also denied the plaintiff’s motion to remand, finding neither Colorado River abstention nor Brillhart abstention applicable. See Count Basie Theatre Inc. v. Zurich Am. Ins. Co., No. 21-615, 2021 WL 3732903 (D.N.J. Aug. 24, 2021).

Zurich American Insurance Company is represented by Philip C. Silverberg, William D. Wilson, and Craig R. Rygiel.

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