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January 14, 2022

Health Law Weekly

Sixth Circuit Holds Property Insurance Policy Did Not Cover Kentucky Dentist’s COVID-Related Losses

  • January 14, 2022

The Sixth Circuit held January 12 that a Kentucky dentist could not recover losses incurred as a result of COVID-related suspensions of operations under his property insurance policy.

Applying Kentucky contracts law, the Sixth Circuit held that neither the pandemic nor government shutdown orders caused a “direct” “physical loss” to the dentist’s “property” under the terms of the policy.

Ryan Estes, a dentist who has two offices in Kentucky, lost substantial income after the state barred health care professionals from providing non-emergency care during a six-week period at the start of the pandemic.

Estes sought to recover the losses under a property insurance policy issued by the Cincinnati Insurance Company, which covered “direct” “physical loss” to the dental offices. After the insurer denied his claim, Estes sued. The district court dismissed the action.

Noting the interpretation of the contract language was a matter of state law, the Sixth Circuit was convinced the Kentucky Supreme Court would agree that the “average person” would not say Estes suffered a “physical loss” of his dental offices in the COVID-19 context.

“When the policy is read ‘as a whole,’ its other provisions likewise show that a direct physical loss requires the tangible destruction or deprivation of property,” the appeals court said.

Ryan P. Estes, D.M.D v. Cincinnati Ins. Co., No. 21-5587 (6th Cir. Jan. 12, 2022).

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