North State Deli LLC et al. v. The Cincinnati Insurance Co. et al.
A North Carolina Superior Court ruled that a collection of restaurants are entitled to recover under their respective policies for business losses caused by the government mandated shutdowns related to COVID-19. The court reasoned that the policy language, “accidental physical loss or physical damage” could be understood by a reasonable insured to have separate meanings, thus creating an ambiguity that must be construed in favor of the insureds. This ruling is one of the first of many COVID-19 related suits across the country to allow recovery for losses due to government mandated shut down, with many prior rulings reaching a contrary decision. It is also important to note that the policy did not contain a virus exclusion and the existence of which would likely have changed the outcome of the case.