Sandy Point Dental PC said Monday it should not be required to demonstrate that the virus infiltrated its buildings because the local civil authority's shutdown orders prevented the infiltration. It argued it could have "more undeniably fallen under the ambit of the policy" by staying open and putting staff and patients in danger.
In that case, the virus would have definitely spread to the clinic's covered properties, but the "role of insurance is to give businesses the freedom to choose the safer route, not the incentive to live dangerously," the dental office claimed in its response to Cincinnati's motion to dismiss.
Sandy Point, which was forced to pause most of its business in March, sued Cincinnati in April over its refusal to pay out on its policy. As only emergency dental procedures are considered essential under the recommendations of state officials, and 95% of the clinic's work is routine or elective dental procedures, the order effectively shut the clinic down.
In its Monday response, Sandy Point said the "insurance industry specifically recognized the applicability of its policies to pandemics and sought to disclaim them." While many other policies contain a virus disclaimer, its policy with Cincinnati does not have such exclusions, so the policy covers COVID-19, the clinic said.
Cincinnati previously argued that the clinic was not shut down because the virus was present on its property surface, and so therefore no physical damage actually occurred. But the clinic said Monday that the policy clearly covers more than just the physical structure of the building, adding that courts have routinely held physical damage is not limited to structural damage of property but the loss of use.
"Much like gas under a church made it dangerous to operate inside of the church, COVID-19 made it impossible to operate inside plaintiff's premises," Sandy Point said. "The terms physical damage, physical injury, and physical loss are all terms of art that have been interpreted to apply to work stoppage due to physical conditions that render the premises of the business unusable."
The dental office also rebuffed Cincinnati's argument that because COVID-19 can be cleaned from surfaces its impact cannot be covered, claiming the notion "flies in the face of reality."
"COVID-19 is an airborne viral pandemic spread by contact with carriers, not a contaminant that can be decisively removed from a premise with a cloth," it said in the response.
Sandy Point told the court that the current trend of COVID-19 business loss litigation is to allow suits to move forward to the discovery stage because insurance policies need to be construed "strictly" against insurers, especially if there are "serious ambiguities" in the policy language. Therefore, it should be allowed to conduct discovery on whether Cincinnati acted in bad faith by denying coverage, the dental clinic said.
Representatives for the parties did not immediately respond to requests for comment.
Sandy Point Dental is represented by Charles A. Silverman of Charles Aaron Silverman PC.
Cincinnati is represented by Brian M. Reid, Dennis M. Dolan and Michael P. Baniak of Litchfield Cavo LLP.
The case is Sandy Point Dental PC v. The Cincinnati Insurance Co. et al., case number 1:20-cv-02160, in the U.S. District Court for the Northern District of Illinois.
--Editing by Daniel King.
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