The carrier filed the motion together with HDI Global Specialty SE, which issued commercial property coverage together with Lloyd's to Atma Beauty, a full-service salon and spa in Miami Beach, Florida.
Lloyd's and HDI Global claimed that the salon fell short of proving it experienced any physical damage or that state shut-down orders prohibited access to its property. The carriers added that COVID-19 is "unquestionably a microorganism" and poses a threat to human health, coverage of which is precluded under the policy's microorganism and pollution exclusions.
According to court filings, the salon has been shuttered since the March 19 order from Miami-Dade County that forced all nonessential businesses, including salons, to close in an effort to curb the spread of the coronavirus. It filed a claim to the carriers in early April and brought the lawsuit later that month.
In Tuesday's motion, Lloyd's and HDI Global said that any claim arising out of novel coronavirus, also known as SARS-CoV-2, is excluded "regardless of whether physical damage occurred or whether there is some other contributing or concurrent cause" since COVID-19 is both a microorganism and a pollutant specifically precluded by the policy.
The carriers claimed that the salon was unable to show it experienced physical damage since it did not allege anything was "repaired, rebuilt or replaced." And "if property can be cleaned and restored to its original function," there is no physical loss, they said, adding that the novel coronavirus damages lungs but not any physical property.
"Plaintiff makes conclusory allegations that it has suffered direct physical damage, but the complaint is devoid of any mention of what physical damage occurred, how the physical damage occurred, and when the physical damage occurred," Lloyd's and HDI Global argued.
Additionally, the carriers said, the policy's civil authority coverage would not apply because the government closure orders did not "prohibit access" to Atma Beauty, as the salon's staff was never restricted from entering the business.
"While the subject government orders prohibited plaintiff from allowing customers into the property for business purposes, no government order prevented plaintiff itself, or its employees, from entering the property," the insurers claimed.
Lloyd's and HDI Global maintained that the government orders were not issued because businesses experienced direct physical damage, but were "put in place to promote social distancing and slow the spread of COVID-19 by minimizing contact between residents."
Representatives for the parties could not be immediately reached for comment.
Atma is represented by Aaron S. Podhurst, Steven C. Marks, Lea P. Bucciero, Matthew P. Weinshall and Kristina M. Infante of Podhurst Orseck PA.
The insurers are represented by Armando Pedro Rubio of Fields Howell.
The case is Atma Beauty Inc. et al. v. HDI Global Specialty SE et al., case number 1:20-cv-21745, in the U.S. District Court for the Southern District of Florida.
--Editing by Michael Watanabe.
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