In a complaint filed Thursday, Sky Fitness alleged Cincinnati has breached the insurance contract by refusing to cover its pandemic-related losses after its gym, health clubs, spas and cafes were forced to shut down due to government closure orders last year.
The fitness company said the pandemic is a natural disaster covered under its commercial property policy, which pays for business income losses and losses related to civil authority orders. Additionally, the company argued, the airborne novel coronavirus causes physical damage because it cannot be removed from a property by routine cleaning.
"Unlike surface cleaning of visible substances like dust or debris, where the degree of 'clean' may be visually confirmed to a reasonable degree of certainty, that is not the case for the cleaning and disinfection of COVID-19 because COVID-19 is not visible to the naked eye," the company said.
Sky Fitness said the interior of its fitness center, lounge and cafe lost its intended function after its members and guests were no longer able to physically visit and occupy the space. The fitness company said it also had to physically alter and rearrange its facilities to create social distancing to curb the spread of the virus after it was allowed to reopen.
Sky Fitness stressed that its insurance claim should be covered since its property experienced direct physical damage and a physical loss of use covered by the policy.
"Plaintiffs' operations were inexorably altered, in that patrons were no longer able to physically occupy the interior of plaintiffs' fitness center and café operations were completely lost, employees were lost, and suppliers were lost," the complaint said.
Gyms, like scores of other businesses, have been hit with losses after being forced to shut their doors amid the pandemic. Some gyms fighting coverage suits with insurers have seen their suits tossed.
Last month, a federal judge ruled that a New Jersey gym, Body Physics, cannot compel its insurer to cover its pandemic-related losses after lockdown requirements kept it closed. The policy's virus exclusion clearly barred any virus-related loss or damage from coverage, according to the judge.
In November, a Florida state judge said a fitness center's losses from the pandemic and government orders were "purely economic" and not covered. Dime Fitness LLC's financial loss did not satisfy the coverage precondition under its policy for "direct physical loss or damage," the judge ruled.
Representatives for the parties could not be immediately reached for comment.
The fitness company is represented by Steven A. Hart, Robert J. McLaughlin and Jack Prior of Hart McLaughlin & Eldridge LLC and Michael Childress, Brian S. Kabateck, Christopher Noyes and Marina R. Pacheco of Kabateck LLP.
Counsel information for Cincinnati was not immediately available.
The case is 1501 Busch Parkway LLC et al. v. The Cincinnati Insurance Co., case number 1:21-cv-02183, in the U.S. District Court for the Northern District of Illinois.
--Additional reporting by Shawn Rice. Editing by Daniel King.
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