Transform Holdco LLC, the operator of Sears Roebuck & Co. and Kmart retail stores, has filed a lawsuit against 17 insurance companies including Lloyd’s Underwriter Syndicate No. 318 MSP, Neon Syndicate 2468, Tokio Marine American Insurance Company, Ironshore Specialty Insurance Company, Zurich American Insurance Company among others in the Appellate Court of Illinois (Case ID: 1-23-0732) on March 25, 2024. The lawsuit seeks insurance coverage for business interruption losses due to the COVID-19 pandemic.
The plaintiff initially filed a complaint for declaratory judgment against the defendants on June 8, 2022. Transform Holdco alleges that it was forced to limit its retail operations to providing only essential services and incurred significant costs to alter its properties to control foot traffic and constantly remediate its properties to minimize the risk of transmission. The company argues these losses were caused both by the physical presence of SARS-CoV-2 at its properties and by government orders issued in response to the pandemic.
The trial court dismissed Transform Holdco's complaint which sought a declaratory judgment that it was entitled under commercial property policies insuring it against "all risk of direct physical loss or damage" to insured property, to indemnity for business interruption losses and expenses as a result of the presence at its premises of SARS-CoV-2. The plaintiff also appeals the trial court’s dismissal of defendant Westport Insurance Corporation based on a provision of its policy that vested exclusive jurisdiction in the courts of New York.