Federal Judge Throws Virus Coverage Query To Ohio Justices

By Daphne Zhang
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Law360 (January 21, 2021, 6:46 PM EST) -- An Ohio federal judge has asked the state's high court to certify whether COVID-19 causes property damage covered in insurance policies, saying such "unresolved" questions of Ohio law belong to the Ohio Supreme Court to ensure uniformity of state law applications.

U.S. District Judge Benita Y. Pearson on Tuesday refused to rule on whether Cincinnati Insurance Co. should pay for an Ohio audiology practice's business loss due to the pandemic and state-mandated closures. The judge closed the case and said the parties should send in status reports every 60 days while the case is pending in state court.

Judge Pearson said the Ohio Supreme Court should certify the question of whether the existence of COVID-19 on a property or an infected person's presence there constitutes direct physical loss or damage on a covered property.

"No controlling precedent of the Supreme Court of Ohio answers this question," the judge said. Certification of such a question will bring uniformity to how to apply state laws regarding these insurance policies, she added.

As "dozens, if not hundreds of cases" seeking pandemic-related coverage hit the Ohio court systems, "differing interpretations of Ohio contract law by different courts threaten to undermine the uniform application of that law to similarly situated litigants," Judge Pearson said.

According to the suit, Hearing was forced to cease operations last March and resumed some operations last May. The audiology practice said it has suffered significant business income interruptions. Hearing held an all-risk policy with Cincinnati that did not contain a virus or pandemic exclusion.

After the practice filed an insurance claim, the carrier denied coverage, asserting there was no physical loss or damage, a precondition for coverage. In June, Hering sued Cincinnati for coverage, seeking to certify a nationwide class of policyholders that have also been denied coverage for losses related to the pandemic.

The Tuesday order came on the same day as U.S. District Judge Dan Aaron Polster from the same court ruled that Zurich American Insurance Co. must cover COVID-19-related losses suffered by over a dozen steak and seafood restaurants, finding that the eateries' policies can reasonably be interpreted to cover the loss of use of property. The judge agreed with the restaurants that neither the microorganism exclusion nor loss of use exclusion bars coverage.

Judge Polster's decision marked only the fourth time a judge has ruled outright that a policyholder is entitled to coverage for pandemic-related losses, according to data compiled by the University of Pennsylvania's Carey School of Law. Earlier this month, the Cherokee Nation prevailed in a COVID-19 business interruption coverage dispute with several of its insurers in Oklahoma state court, and restaurants in North Carolina and Washington state notched summary judgment victories last year.

Counsel for the parties could not be immediately reached for comment. 

Hearing is represented by Shanon J. Carson and Y. Michael Twersky of Berger Montague and William A. Ladnier and Greg Frederic Coleman of Greg Coleman Law.

Cincinnati is represented by Daniel M. Kavouras, Michael K. Farrell and Rodger L. Eckelberry of BakerHostetler and Laurence J. Tooth, Marisa A. Pocci and Paul G. Roche of Litchfield Cavo.

The case is Neuro-Communication Services Inc. v. Cincinnati Insurance Co. et al., case number 4:20-cv-01275, in the U.S. District Court for the Northern District of Ohio, Eastern Division.

--Editing by Marygrace Murphy.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

Neuro-Communication Services, Inc. v. Cincinnati Insurance Company et al

Case Number



Ohio Northern

Nature of Suit



Benita Y. Pearson

Date Filed

June 10, 2020

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