By Mike Curley

Law360 (October 13, 2020, 6:37 PM EDT ) The Cincinnati Insurance Co. and one of its insurance agents are pushing an Illinois federal court to throw out a suit by the owners of a St. Louis hotel over COVID-19 business loss coverage, saying the policy unambiguously does not cover the pandemic.

The insurer and Robertson Ryan and Associates Inc., which sold 1501 Washington St. Louis LLC the insurance policy, made their arguments in separate memorandums Monday, with Cincinnati Insurance adding that the Last Hotel has sued the wrong company.

According to the memorandum, the hotel is actually covered by a separate entity, The Cincinnati Casualty Co. As a result, Cincinnati Insurance said it is not a party to the policy and cannot be held liable for it.

Even if the hotel had hit the right company with the suit, Cincinnati Insurance argued it still would not be entitled to lost business income coverage because COVID-19 has only caused economic loss, and not the physical loss of or damage to property required by the policy.

The insurer pointed to several recent decisions where courts have held the virus does not trigger this type of coverage, such as Sandy Point Dental PC v. The Cincinnati Insurance Co. et al., which was heard in the same district court.

Cincinnati Insurance further argued that the civil authority coverage Last Hotel seeks requires the existence of physical loss or damage, which it said COVID-19 cannot cause because it can be cleaned off surfaces, and also requires a "prohibition of access," which it said the hotel cannot allege because its staff has had access to the site.

The hotel sued Cincinnati Insurance and Robertson Ryan in a case removed to federal court last week, alleging the pandemic triggered a "crisis event" provision in its policy. According to the complaint, Robertson Ryan had promised to procure an insurance policy that provided the coverage the hotel needs, but instead got it a policy that Cincinnati Insurance now claims does not cover the pandemic.

In its separate memorandum, Robertson Ryan argued it delivered the policy that Last Hotel asked for, a "crisis event" policy that covers contamination, communicable diseases and viruses. The agent said it had no duty to go beyond what the hotel specified in its request, and that it was up to the hotel to read through the policy and see how exclusions, such as a pandemic exclusion in that coverage, affect it.

"Robertson Ryan procured the coverage that the plaintiffs allege they requested," the agent told the court. "Robertson Ryan did not owe the plaintiffs any duty to recommend coverage that the plaintiffs did not request, or explain to the plaintiffs how the exclusion for pandemics affected their coverage."

In addition, the agent said the Last Hotel needs to demonstrate there were other policies available that would have granted the coverage it seeks at the time Robertson Ryan procured the policy, but no such allegation is in the complaint.

An attorney for Robertson Ryan declined to comment.

Representatives for the hotel and Cincinnati could not immediately be reached for comment Tuesday.

The hotel is represented by Michael S. Pomerantz, Bryan D. King and Glenn M. Kanter of Brown Udell Pomerantz & Delrahim Ltd.

Cincinnati Insurance is represented by Brian M. Reid and Michael P. Baniak of Litchfield Cavo LLP.

Robertson Ryan is represented by J. Hayes Ryan and Brian H. Myers of Gordon Rees Scully Mansukhani LLP.

The case is 1501 Washington St. Louis LLC et al. v. The Cincinnati Insurance Co. et al., case number 1:20-cv-05922, in the U.S. District Court for the Northern District of Illinois.

--Additional reporting by Daphne Zhang. Editing by Marygrace Murphy.

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