In four back-to-back oral arguments covering seven different cases Thursday, the panel heard from a range of businesses that claim their policies with insurers Aspen Specialty Insurance Co., Zurich American Insurance Co., West Bend Mutual Insurance Co.,and Cincinnati Insurance Co. cover their pandemic-related losses.

For hours, the judges peppered counsel on both sides with questions and hypothetical scenarios about when a business would and would not be covered under the insurance policies. The insurers argued the businesses suffered no physical damage or loss of use that would warrant coverage.

Counsel for the owner of the Ritz-Carlton in Dallas disagreed.

“The parties were clear in this policy that communicable disease and public closure orders, even food poisoning, was a risk of direct physical loss or damage,” said Timothy W. Burns of Burns Bowen Bair LLP, urging the panel to reverse.

But according to Jeffrey Babbin of Wiggin & Dana LLP, counsel for the hotel’s insurer, Zurich American, “There has to be physical loss or damage to property, and let’s be clear, the Dallas Ritz-Carlton suffered no such loss.”

U.S. Circuit Judge Diane P. Wood said at one point during the hearings Friday that she was struggling to understand the businesses’ argument that executive orders requiring people to stay home amid the pandemic “did anything, physically,” to their properties, and said she found the argument that the orders don’t fall within an ordinance or law exclusion “pretty hard to swallow.”

U.S. Circuit Judge David F. Hamilton said he was struggling to grasp the insurers’ argument that viruses are not a form of microorganism, saying that if he were a district court judge and an insurer took the position that the term “microorganism” applied to bacteria but not viruses, he’d “probably be inclined to award punitive damages against the insurance companies trying to draw that line.”

Jason O. Barnes of Simmons Hanly Conroy, counsel for a restaurant fighting Cincinnati Insurance, agreed with Judge Hamilton, arguing that COVID-19 travels via droplets in the air, which are physical things, and that “to suggest otherwise throws 150 years of science out the window.”

Joseph Lubin, who is representing another business fighting Cincinnati Insurance, said it was the insurance companies’ role to exclude the risk of viruses if they thought they should do so.

Lubin said that while insurers changed some policies to exclude losses stemming from communicable diseases like SARS, “this is one of the policies where they didn’t fix it.”

Steven Mikuzis of Mag Mile Law LLC, representing Bradley Hotel Corp. which owns a Quality Inn in Illinois, said similarly that “for whatever reason,” Aspen Specialty Insurance Co. “chose to write a broad policy,” and that it can’t back out of it now.

But counsel for Aspen, Virginia A. Seitz of Sidley Austin LLP, argued that “loss of use is excluded when it’s untethered to physical loss or damage.”

Jason R. Fathallah of Husch Blackwell LLP, counsel for West Bend Mutual Insurance Co., argued that the pandemic-related loss alleged by a small business in Illinois must be permanent for insurance coverage to be triggered.

But Judge Wood said she didn’t understand “at all” why partial, but temporary loss, is insufficient to trigger coverage.

The judges took all the cases under submission.

Representatives and counsel for the parties did not immediately respond to requests for comment Friday afternoon.

Judges Daniel A. Manion, Diane P. Wood, and David F. Hamilton sat on the panel for the Seventh Circuit.

Bradley Hotel is represented by Steven Mikuzis of Mag Mile Law LLC.

Aspen Specialty Insurance Co. is represented by Virginia A. Seitz of Sidley Austin LLP.

Crescent Plaza Hotel Owner LP is represented by Timothy W. Burns of Burns Bowen Bair LLP.

Zurich American Insurance Co. is represented by Jeffrey Babbin of Wiggin & Dana LLP.

Mashallah is represented by William E. Meyer Jr. of Fuksa Khorshid LLC.

West Bend Mutual Insurance Co. is represented by Jason R. Fathallah of Husch Blackwell LLP.

Bend Hotel Development Co. is represented by Jonathan Lubin of the Law Office of Jonathan Lubin.

TJBC Inc. is represented by Jason O. Barnes of Simmons Hanly Conroy.

Cincinnati Insurance Co. is represented by Daniel G. Litchfield of Litchfield Cavo LLP.

The cases are Bradley Hotel Corp. v. Aspen Specialty Insurance Co., case number 21-1173; Crescent Plaza Hotel Owner LP v. Zurich American Insurance Co., case number 21-1316; Mashallah Inc v. West Bend Mutual Insurance Co., case number 21-1507; and the consolidated case Bend Hotel Development Co. v. Cincinnati Insurance Co., case number 21-1559, all in the U.S. Court of Appeals for the Seventh Circuit.

–Editing by Marygrace Murphy