Boston-based online retailer claims Covid-19 damaged property in its offices, wants insurer to pay up

Rue Gilt Groupe, in Fort Point's Channel Center, today sued the Zurich American Insurance Co. for refusing to pay a claim based on the physical damage Rue Gilt says the coronavirus caused not only to the desks and other "non-porous" surfaces - and also the very air itself - in its headquarters, but to similar surfaces and air or five miles around.

Rue Gilt's suit, filed in Suffolk Superior Court, is the latest in a second-generation wave of complaints against insurers over Covid-19 losses, in which companies claim the virus did more than just force changes in the way companies work, it altered their physical property. A Newton hotel investment firm filed a similar suit, also in Suffolk Superior Court, last month, charging that the changes the virus made are covered under its "all risks" policy.

In contrast, companies, such as Legal Seafood, which filed such suits early in the pandemic, tended to lose on claims related to their "all risks" policies because those required proof of physical damage and judges said that simply being ordered to close a workplace by the government did not by itself involve result in any damage to chairs, desks or anything else physical.

In its complaint, Rue Gilt charges that even aside from the fact that it lost access to much of its property and had to install separators and extensively use sanitizers, science now teaches us that "SARS-CoV-2 in the air as shed by COVID-infected persons can cause substantial property damage to the shared air within a property and to the physical property itself." And air infused with the virus inevitably leads to physical damage to non-air property, in particular, non-porous surfaces, the company says, adding it has a lot of non-porous surfaces in its Boston headquarters, its offices in New York and Kentucky, and its warehouse in Kentucky.

The current evidence shows that infectious SARS-CoV-2 can remain in the air and on surfaces and pose a significant exposure risk on damaged property even if infected individuals are no longer present. Further, the air and the surfaces of indoor work environments, including floors, doors, doorhandles, elevator buttons, handrails, machinery, equipment, computers, keyboards, computer mouses and accessories, documents, and other physical items and surfaces, can be damaged by the presence of people with COVID-19.

It points to a 2021 study that shows that, like the stuff Lysol always warns us about, coronavirus persists on these surfaces for some period of time and charges that "COVID-19 discharges alters physical surfaces and can remain viable on common surfaces such as glass, stainless steel, and money for a month" and that even though Zurich should reimburse it for all the extra separators and sanitizers it had to buy and use, no mitigation efforts will ever be successful because disease-laden individuals will just walk through the place, reinfecting everything.

Rue Gilt says it filed its first Covid-19 claim in April, 2020, and that Zurich rejected it in November of that year, saying that there was no physical property damage and that, in any case, a virus is a "contaminant" not covered by the policy.

Rue Gilt, however, says the "contaminant" clause of its policy does not mention viruses.

The company does not specify just how much in damages it is seeking. However, it says it had purchased a policy to cover up to $125 million in losses.