--- title: "Business Interruption Insurance: Procedural Win and Procedural Loss for Policyholders" date: 2020-08-13T00:00:00-04:00 author: Import Bot canonical_url: "https://www.kelleydrye.com/viewpoints/client-advisories/business-interruption-insurance-procedural-win-and-procedural-loss-for-policyholders" section: Client Advisories --- # Business Interruption Insurance: Procedural Win and Procedural Loss for Policyholders August 13, 2020 Kelley Drye Client Advisory #### Policyholders Defeat Motion to Dismiss in *Studio 417 Inc. et al. v. The Cincinnati Insurance Co.* The Western District of Missouri on Wednesday allowed plaintiffs’ claims to recover business interruption losses due to COVID-19 to proceed, when it [denied](https://www.insurancejournal.com/app/uploads/2020/08/studio-417-v-cincinnati-insurance.pdf) Cincinnati Insurance Company’s (“Cincinnati”) motion to dismiss. Plaintiffs are salons and restaurants who purchased Cincinnati’s All-Loss insurance policy, providing coverage for direct physical losses.The Court was persuaded by Plaintiffs’ argument that staff and guests carrying COVID-19 had likely infected their property rendering it ​“unsafe and unusable” and forcing them to ​“suspend or reduce business.” The Court found that, under Missouri Law, ​“direct physical loss” did not require the property be physically altered if contamination made it unusable. The Court also distinguished the case before it from *Gavrilides Mgmt. Co., LLC v. Michigan Ins. Co.*, [a Michigan case we covered last month](https://communications.kelleydrye.com/24/920/july-2020/7-17---michigan-judge-denies-coverage-for-business.asp?sid=faea9c4f-2c80-421e-8618-f24c0e4b0d0a), in which the Court granted the insurer’s motion to dismiss. The Plaintiffs in *Gavrilides* failed to allege that COVID-19 had actually entered the property, and so could not support a claim of ​“direct physical loss.” #### The JPML Declines To Consolidate On the same day, the Judicial Panel on Multidistrict Litigation elected not to centralize hundreds of businesses interruption cases filed around the country. In [*In re: COVID-19 Business Interruption Protection Insurance Litigation*](https://www.jpml.uscourts.gov/sites/jpml/files/MDL-2942-Transfer%20Order-7-20.pdf), the Panel considered two petitions to consolidate cases against 100 different insurance companies. The Panel concluded that while centralizing cases against a few insurers could be appropriate, any common questions of fact in such a large-scale action would be ​“outweighed by the substantial convenience and efficiency challenges posed by managing a litigation involving the entire insurance industry.“Kelley Drye & Warren LLP will be closely monitoring the case law as it progresses. Please click [here](mailto:marketing@kelleydrye.com?subject=Insurance%20Recovery%20Updates&body=Please%20sign%20me%20up%20to%20receive%20updates%20from%20Kelley%20Drye%20related%20to%20insurance%20recovery.) if you would like to be kept abreast of current developments. - Share this entry - - - - - [ View entry pdf ](https://s3.amazonaws.com/cdn.kelleydrye.com/content/uploads/pdf-snapshots/business-interruption-insurance-procedural-win-and-procedural-loss-for-policyholders-20230614122016.pdf) ### Related Services - [Litigation](https://www.kelleydrye.com/practices/litigation) Blog [ ![](https://d3iuizmsm2hayf.cloudfront.net/content/uploads/Listing-rectangles/Blog_Post_Listing.svg) ![](https://d3iuizmsm2hayf.cloudfront.net/content/uploads/Listing-Images/Trade_and_Manufacturing_Monitor.webp?auto=compress%2Cformat&crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&h=750&q=80&w=1125&s=fa2fce63dfde7da177148c0e92116e0e) ](https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/ustr-announces-final-tariff-rates-exclusions-and-tariff-rate-quotas) Trade and Manufacturing Monitor July 24, 2026 [ ](https://www.kelleydrye.com/viewpoints/blogs/trade-and-manufacturing-monitor/ustr-announces-final-tariff-rates-exclusions-and-tariff-rate-quotas) Article [ ![](https://d3iuizmsm2hayf.cloudfront.net/content/uploads/Listing-Images/AI_Head.webp?auto=compress%2Cformat&crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&h=750&q=80&w=1125&s=068f8566021201ef249ea185eac69761) ![](https://d3iuizmsm2hayf.cloudfront.net/content/uploads/Listing-rectangles/Articles_Listing.svg) ](https://www.kelleydrye.com/viewpoints/articles/ai-is-amazing-your-ads-about-it-still-have-to-be-true) July 23, 2026 [ ](https://www.kelleydrye.com/viewpoints/articles/ai-is-amazing-your-ads-about-it-still-have-to-be-true)