While this Ohio Appellate Court judgment found that the insured did not suffer direct physical loss or damage so as to warrant coverage, it also considered the application of the virus exclusion in the policy

The exclusion reads: 

“We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results

in widespread damage or affects a substantial area. 

j. Virus or Bacteria:

  1. Any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

The court said that the exclusion is clear and unambiguous and excludes coverage for losses caused directly or indirectly by a virus. Even if government orders were in the causal chain of events leading to the insured’s loss, the exclusion applies because the policy language excludes loss caused “directly or indirectly” by the virus. The policy language sweeps aside the causation question.

The court pointed out that even if there were doubt, the policy applies the exclusion “regardless of any cause or event that contributed concurrently or in any sequence to the loss.” That wording deals with any concurrent causation difficulties which may otherwise have arisen.

Insurers would do well to reconsider their policy wordings where they wish to limit the indemnity to the insured peril only and to exclude uninsured concurrent causes.

Judgment: The Nail Nook Inc v Hiscox Insurance Company Inc. et al 2021-Ohio-4211