Insurer Says Gym Owner Losses Prohibited By Virus Exclusion

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Law360 (May 25, 2021, 8:08 p.m. EDT) – Markel Insurance Co. has asked a Virginia federal court to dismiss the lawsuit of a group of Anytime Fitness gym owners seeking coverage for losses due to a pandemic, claiming an exclusion of viruses in their policies precludes all coverage.

None of the gym owners have shown in their proposed class action lawsuit that their properties have been physically damaged by the coronavirus, Markel said on Monday, a prerequisite for coverage of their commercial insurance policies that had previously been prohibited by a exclusion for viruses. In asking to dismiss the complaint, Markel is joining a wave of insurers across the country in hopes of ignoring claims in the event of a pandemic.

The insurer pointed out other exclusions in the policy that prevent coverage of decisions of government agencies that result in loss, as well as ordinances or laws that cause loss by regulating the use of a policyholder’s property. insurance.

In their January complaint, gym owners cited restrictions imposed by the government in response to the pandemic as the main reasons for their losses. Markel, in his attempt to dismiss their complaint, said that because gym owners “unquestionably” alleged losses from the virus, the exclusion of the virus from their policy banned coverage.

“Whether [the gym owners’] losses would arise from the virus itself or orders from civil authorities precipitated by the virus, losses are clearly a result of the coronavirus and are prohibited by the plain language of excluding the virus, “Markel said.

Gym owners have filed a complaint on behalf of a proposed class of 4,500 Anytime Fitness franchises across the United States, according to their complaint. They described their policy with Markel as a policy issued for health clubs.

They face an uphill battle. Federal courts have dismissed more than 80% of coronavirus coverage cases, according to forensic data from Carey Law School at the University of Pennsylvania. Most of the contested policies contained some form of communicable disease or viral exclusion, according to their data.

Gyms and recreation centers are among the businesses hardest hit by the pandemic. The owner of LA Fitness bring its insurers in Washington state court in April, in a case that has since been consolidated and calls for $ 950 million in coverage.

In March, a federal court in New Jersey decreases to hold a national insurance unit accountable for losses due to a pandemic at a gymnasium in Haddonfield. In this case, as in the Anytime Fitness case, the gym policy contained an exclusion for losses resulting from viruses.

Anytime Fitness attorney and Markel’s attorney did not immediately respond to requests for comment.

The owners of the gymnasium are represented by William H. Monroe Jr., Marc C. Greco, Kip A. Harbison and Michael A. Glasser of Glasser & Glasser PLC, Diandra S. Debrosse Zimmermann, Elizabeth Graham and Adam J. Gomez of Grant & Eisenhofer PA, LN Chandler Rogers of Rogers Law Group PA and by Winston B. Collier of The Collier Firm PA.

Markel is represented by Henrik Jonathan Redway, Nicole M. Meyer and Timothy M. Strong of Dickinson Wright PLLC.

The case is Fountain Enterprises LLC et al. v. Markel Insurance Co., Case Number 2: 21-cv-00027, in the United States District Court for the Eastern District of Virginia.

– Additional reports by Daphne Zhang and Lauren Berg. Edited by Haylee Pearl.

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