In a new decision on the issue, a federal judge in Chicago has ruled that reduced seating does amount to an “interruption” in business for purposes of insurance coverage. The insurance carrier, Society Insurance, had submitted a motion to dismiss the lawsuit. Judge Edmond Chang said capacity limits can constitute “direct physical loss” for “business interruption” policies.

Society Insurance had argued that the tables, chairs, walls and floors remained in working condition. But, the restaurants argued that the virus pandemic had created a dangerous condition in the restaurant. The judge said a reasonable jury could conclude the pandemic effected direct physical loss tot he restaurants.

See ABA Bar Journal report.