SALEM — The owners of a downtown Salem restaurant and bar have lost in their effort to get their insurance company to reimburse them for lost business during the COVID-19 pandemic.
The decision by a Lawrence Superior Court judge came two months after the state’s highest court ruled in a similar case that property damage or loss claims require there to be direct physical loss or damage, and not just the passing presence of an airborne substance that will dissipate or that can be removed by simple cleaning.
Village Tavern on Essex Street was one of thousands of businesses around the country that, after being ordered to curtail or close their businesses during the first year of the pandemic, made claims against their business insurance policies.
Attorneys for the businesses argued several legal theories. The Village Tavern’s lawyers argued that the insurer, Certain Underwriters of Lloyds of London, should pay their claim based on the infiltration of the coronavirus into the facility.
In a decision last week, Lawrence Superior Court Judge John Lu concluded that he was bound by the Supreme Judicial Court’s April ruling in a similar case, Verveine Corp. vs. Strathmore Insurance, and granted the motion by the Lloyds underwriters to dismiss the Village Tavern lawsuit.
“In this court’s view there are no grounds on which Verveine Corp. may be distinguished from the current case,” Lu wrote. “Because the Tavern cannot allege facts demonstrating a direct physical loss of or damage to the property within the meaning of the policy, its claims must be dismissed.”
Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.