On July 1, 2020, a Michigan state court dismissed a
coronavirus-related business interruption lawsuit filed by
policyholder restaurants on the pleadings, finding that they failed
to allege any form of physical loss or damage to the property as
required by the policyholders' policy. In Gavrilides
Management Co. et al. v. Michigan Insurance Co., Case Number
20-258-CB-C30, filed in the Thirtieth Judicial Circuit Court of the
County of Ingham, Michigan, Judge Joyce Draganchuk ruled that
direct physical loss is required to trigger business interruption
coverage for loss purportedly arising out of the novel coronavirus
and related government stay-at-home orders.
Background
In Gavrilides, the insured, owner of two restaurants in
Michigan, sought $650,000 in business interruption coverage under
its commercial property policy for losses stemming from
stay-at-home orders issued by Michigan's governor that
temporarily limited all restaurants' business operations to
take out
