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DSW hits insurer with 50 million dollar lawsuit

By Kristopher Fraser

Feb 26, 2021

Designer Shoe Warehouse’s owner has hit its insurer with a lawsuit for 50 million dollars in Illinois Court over business income coverage. The lawsuit states that insurer wrongfully denied coverage for losses caused by the coronavirus lockdown measures which halted operations at 500 of DSW’s retail stores. The news was reported by Law360.

The complaint said that the insurance company, Zurich American Insurance Co., can’t rely on a contamination exclusion to avoid coverage because coronavirus is not a “solid, liquid, gaseous, thermal or other irritant.” Some of DSW’s stores were closed as late as September. DSW stores saw a total of 450 confirmed COVID-19 cases, and the company says with the presence of coronavirus requiring government shutdowns it amounts to a direct physical loss or damage of property under the insurer’s policy.

Zurich has been hit with a flurry of COVID-19 related lawsuits by companies they insure, but in the past month they won three of them. However, last January a federal judge in Ohio ruled that Zurich had to cover losses for a dozen steak and seafood restaurants because the policy could be interpreted to cover the loss of use of property.

DSW’s parent company, Designer Brand’s Inc., filed the complaint to challenging the contamination exclusion saying it doesn’t apply to a public health crisis. The company is also fighting against exclusions for economic loss, inability to use its property, and lockdowns based on government ordinances.

The case is being handled in the Circuit Court of Cook County. Zurich and Designer Brand’s Inc.’s legal representatives weren’t immediately available for comment.

photo: via PR Newswire