North Carolina justices rule for restaurants in COVID-19 claims but against a clothing chain

RALEIGH, N.C. — North Carolina’s Supreme Court issued mixed rulings Friday for businesses seeking financial help from the COVID-19 pandemic, declaring one insurer’s policy must cover losses some restaurants and bars incurred but that another insurer’s policy for a nationwide clothing store chain doesn’t due to an exception. Worried that coverage would be denied for claimed losses, the restaurants and bars sued and sought a court to rule that “direct physical loss” also applied to government-mandated orders, a court opinion said. But state Supreme Court Associate Justice Anita Earls, writing for the court, noted he Cincinnati policies did not define “direct physical loss.” Earls also noted there were no specific policy exclusions that would deny coverage for viruses or contaminants. But while Cato sufficiently alleged a “direct physical loss of or damage” to property, Earls wrote in another opinion, the policy contained a viral contamination exclusion that Zurich American proved applied in this case.