Closure Orders did Not Trigger Communicable Disease Coverage

The United States Court of Appeals for the Sixth Circuit, applying Ohio law, affirmed the district court’s dismissal of an insured’s claim for coverage of losses stemming from the prevalence of the COVID-19 pandemic. The insured, Dakota Girls, LLC, operates a number of private preschools which were forced to close after the Ohio government issued a shut-down order to child-care facilities at the outset of the pandemic. The Sixth Circuit’s earlier decision in Santo’s Italian Café v. Acuity Ins. Co., 15 F.4th 398 (6th Cir. 2021), left only one provision at issue on appeal here: the communicable disease and water-borne pathogen provision. The Sixth Circuit held that because Dakota Girls could not show that the shutdown order was caused by the presence of a confirmed case of COVID-19 actually on their property, the insurer was not required to cover any loss suffered by Dakota Girls under these provisions. As a result, the Sixth Circuit found in favor of the insurer, affirming the district court’s dismissal of Dakota Girls’ claims. Dakota Girls, LLC v. Philadelphia Indem. Ins. Co., 21-3245, 2021 WL 5144465 (6th Cir. Nov. 5, 2021).