Levy Ad Group v. Chubb Corp.

Levy Ad Group v. Chubb Corp.

Opinion

 [*834]  Order Granting Defendants' Motion to Dismiss and Closing Case

Levy Ad Group, Inc., Levy Production Group, LLC, and Levy Online sue the Federal Insurance Company for failing to provide coverage for economic losses incurred from the closure of their businesses during the COVID-19 pandemic.¹ Federal Insurance moves to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the Levy companies' insurance policy does not provide coverage for their claims.² Because the Levy companies do not and cannot allege direct physical loss or damage—to their property or others'—sufficient to trigger coverage under their insurance policy, I grant Federal Insurance's motion, dismiss this action with prejudice, and close this case.

Background³

Like many businesses throughout the nation, the Las Vegas-based Levy companies shuttered their advertising, [**2]  video-production, and marketing entities because of the spread of SARS-CoV-2, the virus responsible for the COVID-19 pandemic.⁴ Claiming that a series of emergency orders and directives issued by Nevada's Governor Steve Sisolak required their businesses' closure, the Levy companies requested insurance coverage from their provider, Federal Insurance, for their lost "business income and extra expense[s]."⁵ Though they disclaim any obligation to identify specific provisions in their policy providing coverage,⁶ they quote the policy's provision covering "business[-]interruption" losses caused by "the prohibition, by a civil authority, of access to the insured business premise."⁷ The Levy companies also attach the policy to their complaint, which provides coverage for "direct physical loss or damage . . . caused by or result[ing] from a covered peril."⁸ It also provides "additional coverages," including coverage under the referenced civil-authority provision, which states:

"We will pay for the actual: business income loss you incur due to the actual impairment of your operations; and extra expense you incur due to the actual or potential impairment of your operations, directly caused by the prohibition [**3]  of access to: your premises; or a dependent business premises [,] [b]y a civil authority.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.