A judge agreed with West Bend Mutual Insurance Co. and tossed a lawsuit that had been brought by LexFit, a Lexington, Kentucky, gym that had sued West Bend for denying coverage related to business income loss, according to Law360.com.
LexFit operates one club, which was forced to temporarily close in March 2020 after the governor of Kentucky ordered businesses to close to stem the spread of COVID-19.
Soon after the closure, LexFit filed a claim with its insurance company, West Bend, for business loss, but West Bend denied the claim. LexFit then sued West Bend, arguing that its insurance policy with West Bend covered the business income loss that it experienced due to the temporary club closure. West Bend argued that no “direct physical loss of or damage to property” caused by one of the covered causes of loss occurred. West Bend argued that the premiums that LexFit paid did not cover a guarantee of income, and a virus exclusion applied.
In April, West Bend asked the judge to throw out the lawsuit. The judge in the U.S. District Court Eastern District of Kentucky Central Division agreed with the defendant, saying that the losses suffered by LexFit were purely economic, meaning they were not covered by the policy, which specifies “direct physical loss.”
With the judge’s ruling, a jury trial that was scheduled for October was cancelled.