Federal judge dismisses clothing retailer’s lawsuit against Zurich

“Ultimately, the court finds that TCP fails to establish its claim for insurance coverage under the basic terms of the policy – in particular, the court rejects TCP’s arguments that its claim for insurance based on COVID-19 falls within the property damage, time element or special damages policy covers the provisions in dispute,” the decision states.

Salas’ ruling granted Zurich’s motion for judgment on the pleadings, Law360 reported.

TCP had claimed that the presence of COVID-19 within 1,000 feet of its insured locations triggered property damage and “time element” provisions (losses for the time operations were interrupted) from the Zurich police.

But in its decision, Salas said that “critically” TCP is not alleging any tangible or physical loss at its stores. The decision also noted that TCP had also presented no evidence that the virus was present in its stores and surrounding areas.

“Because TCP’s alleged losses are not causally related to the physical condition of its stores, TCP’s claim for insurance coverage falls outside the scope of the policy,” prefaces the court’s decision. judge.

Salas also rejected TCP’s argument that it suffered covered losses related to its inability to use its stores during government-imposed lockdown orders – orders that have led to more stores closing. non-essential businesses.

According to the judge, the government warrants were due to the virus rather than the loss or physical damage to TCP outlets. Salas also noted that the retailer’s complaint only referred to shutdown orders in New York, New Jersey and Los Angeles.

TCP operates approximately 900 stores in the United States, Canada and Puerto Rico.

Salas further rebutted TCP’s claim that it was entitled to recover its losses under Zurich’s special hedging provision by rejecting the retailer’s claim that damage to properties other than its stores would trigger a cover.

“TCP’s arguments fail because it does not allege physical loss or damage to specific third-party property covered by the policy. Further, for the reasons already stated, even assuming that COVID-19 or the virus existed on non-TCP property, it does not constitute physical loss or damage to third-party property.

Anne G. Cash