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Wisconsin Supreme Court Sides Against Colectivo Coffee in COVID-19 Insurance Lawsuit

Colectivo-Madison

A Colectivo Coffee location in Madison, Wisconsin. Daily Coffee News file photo.

The Wisconsin Supreme Court has ruled that losses of income suffered by Colectivo Coffee due to shutdowns early in the COVID-19 pandemic are not covered under the company’s property insurance policy.

The ruling follows numerous similar lawsuits filed on behalf of restaurant and bar businesses against their insurance providers, with courts predominantly denying “property loss” claims due to COVID-19-related retail interruptions.

The court opinion, authored by Wisconsin Supreme Court Justice Rebecca Dallet, ruled in favor of business insurance provider Society Insurance, with whom Colectivo had signed a new property insurance policy in February 2020, just prior to the pandemic onset.


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Along with a class of other restaurant and bar businesses, the coffee roasting and retail company argued that shutdowns ordered by the state health department to prevent the spread of COVID-19 in March of 2020 led to a loss of property usage in cafes that should be covered by the insurance policy.

Dallet wrote that the court’s primary considerations in the case were: 1) to determine whether a bar or restaurant’s inability to use its dining space for in-person dining constitutes a “direct physical loss of” or “damage” to property under the insurance policy; and 2) to determine whether a “contamination provision” in the policy applied to the potential presence of COVID-19 particles on a bar or restaurant’s property.

The court ultimately decided “no” in both questions.


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Comment

1 Comment

dean cycon

Nice try, guys. We all suffered dramatically during the worst of covid, but as a lawyer I can tell you that theory was a total stretch.

Besides, I am certain that you got plenty of money from PPP, right?

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