The insured beauty salon's claim for losses caused by shutdown orders due to COVID-19 survived the insurer's motion to dismiss based upon a Communicable Disease endorsement. Treo Salon, Inc. v. West Bend Mut. Ins. Co., 2021 U.S. Dist. LEXIS 88577 (S.D. Ill. May 10, 2021).      The insured's policy included an endorsement for Communicable Disease Business Income and Extra Expense Coverage. It provided coverage for any shutdown or suspension be due to an outbreak of communicable disease at an insured premises. The insured's beauty salon was ordered closed when the pandemic hit.      When coverage was denied, the insured filed a class action complaint seeking a declaratory judgment that its losses were covered by the Communicable Disease endorsement.  West Bend moved to dismiss arguing that coverage was triggered only if: (1) there was a communicable disease at the insured's premises; and (2) the business closed due to the outbreak. The insured did not establish that any governmental order was "due to" any outbreak on their premises.      The court noted that the case dealt with a specific and finite policy endorsement, not a traditional business interruption provision. Here, there was no doubt that the shutdown orders were in response to the outbreak of COVID-19. The issue was whether the shutdown due to an outbreak was at the insured premises. West Bend could not be certain that COVID-19 was not at the premises. The insured sufficiently pled a cause of action against West Bend and plausibly alleged that it was entitled to coverage. 

from Insurance Law Hawaii https://ift.tt/3vsNU5q