The Minnesota Court of Appeals found losses from government orders issued during the COVID-19 pandemic were covered by an endorsement which also provided for several occurrences suffered by the insured. Life Time, Inc. v. Zurich Am. Ins. Co., 2025 Minn. App. LEXIS 269 (Minn. Ct. App. Aug. 11, 2025).
Life Time, Inc. operated health and fitness clubs across the United States with 150 locations. Life Time was ordered to close its locations to the public for periods of time in 2020.
Life Time had a policy from Zurich which included “Interruption by Communicable Disease” (ICD) coverage. The endorsement provided,
The Company will pay for the actual Gross Earnings loss sustained by the Insured as provided by this Policy, resulting from the necessary Suspension of the Insured’s business activities at an Insured Location if the Suspension is caused by order of an authorized governmental agency enforcing any law or ordinance regulating communicable diseases and such portions of the location are declared uninhabitable due to the threat of the spread of communicable disease, prohibiting access to those portions of the Location.
The policy limited ICD coverage to $1 million. “Occurrence” was defined as “[a]ll loss(es) or damage that is attributable directly or indirectly to one cause or a series of similar or related causes.”
By March 16, 2020, governmental authorities in multiple jurisdictions across the country had issued orders that required Life Time to close 56 locations. The timelines for reopening varied across the country. Some shutdown orders were extended without a break. And some jurisdictions ordered a second round of closures after allowing the fitness centers to reopen for a period. In total, 29 jurisdictions issued shutdown orders that affected Life Time’s location. Across those 29 jurisdictions, Life Time identified 41 orders that required it to close locations.
Life Time submitted a claims for ICD coverage to Zurich asserting losses at approximately 150 locations. Zurich maintained that all COVID-19-related closures constituted one occurrence under the policy. As a result, it determined that Life Time’s coverage for its losses across all locations was capped at $1 million.
Life Time sued, asserting declaratory judgment and breach of contract claims. Life Time argued that it was entitled to $1 million in coverage for each of its insured locations. The district court granted Zurich’s motion for summary judgment. The district court determined that the cause for determining an occurrence was the precipitating event, or the threat of COVID, not the shutdown orders. There was only one occurrence because the COVID-19 pandemic was a singular force causing the shutdown of Life Time’s clubs.
On appeal, Life Time argued that, because the ICD endorsement provided coverage for losses that were “caused by” a governmental shutdown order, such governmental order was a “cause” of its losses for purposes of determining the number of occurrences subject to the $1 million ICD coverage limit. Therefore, there were 41 occurrences – one for each of the distinct shutdown periods that it identified. Zurich, on the other hand, argued that to determine the number of occurrences, the court should look only to the underlying cause of Life Time’s losses: the threat of the spread of COVID-19.
The appellate court agreed with Life Time. Life Time’s losses occurred because governments decided to issue shutdown orders in response to the threat of COVID-19. The orders were independent actions that varied in time, length, and degree. Some governments chose to allow businesses to remain open; others ordered widespread closures. The bulk of the shutdown orders occurred in March 2020, but some jurisdictions ordered additional periods of shutdown when variants of the original pathogen drove resurging case counts. The orders were separate from the threat of the spread of communicable disease that persisted throughout the COVID-19 pandemic.
The losses subject to coverage were “attributable to,” i.e., caused by, the governmental orders, not the pandemic itself. The orders were also the causes of the losses for purposes of determining the coverage limit.
With respect to governmental orders issued in separate jurisdictions, the court determined they were not a “series” as noted in the policy’s definition of “occurrence.” The orders from different jurisdictions did not come one after another in succession. Many jurisdictions released orders on the same day, and there was no connection between when, how, and whether the different jurisdictions released their own shutdown orders. It could not logically be said that the orders released in separate jurisdictions, with no relationship to one another, could be considered a series. However, multiple orders from the same jurisdiction were a “series.” If a jurisdiction issued a new shutdown order after reopening, it could not be denied that the first and second orders were events that occurred in succession.
Because the governmental orders within the same jurisdiction constituted one occurrence, the court concluded that there were 29 occurrences, rather than 41 occurrences as Life Time argued.