EXHIBIT A 

Case: 1:20-cv-03768 Document #: 1-1 Filed: 06/26/20 Page 1 of 12 PageID #:19
SHODEEN GROUP LLC 5/13/2020

17 NORTH FIRST STREET

GENEVA, IL 60134

Insured: SHODEEN GROUP, L.L.C. And 

As Per IL T8 00

Policy #: YO630-0K557677

Claim/File#: FMW7814 001H

Date of Loss: 3/15/2020

Underwriting Company: THE CHARTER OAK FIRE INSURANCE COMPANY

Dear Mr. Herman,

This letter follows our recent discussion regarding the above-referenced claim. We have reviewed both 

the information you provided and the terms of your client’s policy with THE CHARTER OAK FIRE 

INSURANCE COMPANY (Travelers). Based on the foregoing, we have concluded that your policy does 

not provide coverage for your claimed loss of income. The reasons for our conclusion are set forth 

below.

The Claimed Loss

You originally presented a claim on behalf of your client for loss of income related to the Coronavirus 

(COVID-19) outbreak. During our discussion on 04/24/2020, you advised that the Governor of Illinois had 

issued an order that affected the operation of your client’s business as part of the government’s efforts 

to prevent the spread of the COVID-19 virus (Governmental Order). You reported The Herrington Inn & 

Spa located at 15 S. River Lane Geneva, IL 60134 (location 29 building 29 in the policy); owned by our 

policyholder was closed due to the Governor’s order to prevent the spread of the Covid-19 virus. In 

addition to the Inn & Spa being closed the restaurant portion of this location is also closed to table 

service and the policyholders are not providing to-go or pick-up service. You advised that your clients 

sustained a loss of income as a result of the Governmental Order. There is no report of any direct 

physical damage to the insured premises.

We received an e-mail from you on 05/13/2020 in which you reported your clients are now making a 

claim for 35 N. River Lane Geneva, IL 60134 (location 28 building 28 in the policy). You reported in the email the insured’s have the same situation at this location as they did with the 15 S. River Lane Geneva, 

IL 60134 location. This location is a Banquet facility that has been closed due to the Governors Order. 

You confirmed the insured’s own this property; the banquet facility is closed, and the insureds are not 

providing to-go or pick-up service related to the restaurant portion of this banquet facility. There is no 

report of any physical damage at this location.

Your client’s policy includes three coverages that, under certain circumstances, may afford coverage for 

a loss of income. The first is Business Income and Extra Expense coverage, the second is Civil Authority 

coverage and the third is Ingress or Egress coverage. Each is discussed separately below.

P.O. Box 650293

Dallas, TX 75265-0293

(877) TRAVCAT (872-8228)

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Business Income and Extra Expense Coverage

Under certain circumstances, their policy’s Business Income and Extra Expense coverage may afford 

coverage for a loss of income. That coverage provides in pertinent part:

A. COVERAGE

We will pay for: 

• The actual loss of Business Income you sustain due to the necessary 

"suspension" of your "operations" during the "period of restoration"; and 

• The actual Extra Expense you incur during the "period of restoration";

caused by direct physical loss of or damage to property at premises which are 

described in the Declarations and for which a Business Income and Extra 

Expense Limit of Insurance is shown in the Declarations. The loss or damage 

must be caused by or result from a Covered Cause of Loss.

 ***

See Deluxe Business Income (and Extra Expense) Coverage Form (DX T1 01 11 12) at page 1 (emphasis 

added).

The presence or possible presence of the COVID-19 virus does not constitute “direct physical loss of or 

damage to property” within the meaning of your client’s policy. Because the limitations on your client’s

business operations were the result of the Governmental Order, as opposed to “direct physical loss of or 

damage to property at premises which are described,” as listed on the IL T0 03 location schedule of your 

policy this Business Income and Extra Expense coverage does not apply to your client’s loss. 

In addition, in order for this coverage to apply, the suspension of operations must have been caused by 

direct physical loss of or damage that resulted from a Covered Cause of Loss. As stated on page 2 of 

Deluxe Business Income (and Extra Expense) Coverage Form (DX T1 01 11 12), Covered Causes of Loss 

are “RISKS OF DIRECT PHYSICAL LOSS” that are not otherwise limited or excluded. Your client’s policy 

includes, among other exclusions, an exclusion for “loss or damage caused directly or indirectly by” “any

virus” -- such as the COVID-19 virus -- “that induces or is capable of inducing physical distress, illness or 

disease.” As explained in more detail below in the discussion of policy exclusions, your claim does not 

implicate a Covered Cause of Loss, as is required in order for Business Income and Extra Expense 

coverage to apply. 

 

Civil Authority Coverage

Their policy’s Civil Authority coverage provides in pertinent part: 

4. Additional Coverages 

***

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c. Civil Authority

(1) When a Covered Cause of Loss causes damage to property other than property at 

the described premises, we will pay for the actual loss of Business Income you 

sustain and the actual Extra Expense you incur caused by action of civil authority 

that prohibits access to the described premises, provided that both of the 

following apply:

(a) Access to the area immediately surrounding the damaged property is 

prohibited by civil authority as a result of the damage, and the described 

premises are within that area but are not more than 100 miles from the 

damaged property; and

(b) The action of civil authority is taken in response to dangerous physical 

conditions resulting from the damage or continuation of the Covered Cause 

of Loss that caused the damage, or the action is taken to enable a civil 

authority to have unimpeded access to the damaged property.

***

See Deluxe Business Income (and Extra Expense) Coverage Form (DX T1 01 11 12) at pages 2-3 

(emphasis added).

Thus, there are three elements, all of which must be satisfied, in order for Civil Authority coverage to 

apply. We will address each of those elements as they relate to your client’s claim:

1. A civil authority must prohibit access to the described premises: We have reviewed the 

Governmental Order.

This requirement for Civil Authority coverage is not satisfied. The Government may have limited 

the operations that may be performed at your client’s premises, but it did not completely 

prohibit access to the premises. 

2. The prohibited access to the described premises must be due to damage to property at other 

locations, other than the described premises, that are within 100 miles of the described 

premises: This requirement for Civil Authority coverage is not satisfied. The presence or feared 

presence of the COVID-19 virus does not constitute “damage to property” within the meaning of 

your client’s policy. The Governmental Order that affected your client’s business was not issued 

due to “damage to property.” It was issued as part of the government’s efforts to slow the 

spread of the COVID-19 virus. 

3. The damage to property must be caused by or resulting from a Covered Cause of Loss: This 

requirement for Civil Authority coverage is not satisfied. Your client’s policy includes, among 

other exclusions, an exclusion for “loss or damage caused directly or indirectly by” ... “any virus” 

-- such as the COVID-19 virus -- “that induces or is capable of inducing physical distress, illness or 

disease.” As explained in more detail below in the discussion of policy exclusions, your claim 

does not implicate a Covered Cause of Loss.

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Therefore, because not all of the requirements that must be satisfied in order for Civil Authority 

coverage to apply are present in your client’s claim, Civil Authority coverage does not apply.

Ingress or Egress Coverage

Their Policy’s Ingress or Egress Coverage provides in relevant part: 

5. Coverage Extensions

***

b. Ingress or Egress

(1) You may extend the insurance provided by this Coverage Form for:

(a) The actual loss of Business Income you sustain due to the necessary 

"suspension" of your "operations" during the "period of restoration"; and

(b) The actual Extra Expense you incur during the "period of restoration"; 

to apply to the actual amount of such loss of Business Income and Extra Expense that 

you incur when ingress to or egress from the described premises is prevented (other 

than as provided in the Civil Authority Additional Coverage). 

(2) The prevention of ingress to or egress from the described premises must be 

caused by direct physical loss or damage by a Covered Cause of Loss to property 

that is away from, but within 1 mile of the described premises, unless a different 

number of miles is shown in the Declarations. . . . 

***

See Deluxe Business Income (and Extra Expense) Coverage Form (DX T1 01 11 12) at pages 5-6 

(emphasis added).

There is no Ingress or Egress coverage for your client’s business income loss because there was no 

prevention of ingress to or egress from your client’s premises. Additionally, there has been no direct 

physical loss or damage by a Covered Cause of Loss to property away from, but within 1 mile of the 

described premises.

Policy Exclusions

As noted above, their policy’s Business Income and Extra Expense coverage, Civil Authority coverage and 

Ingress or Egress coverage all require damage to property caused by a Covered Cause of Loss. “Covered 

Causes of Loss is defined, in relevant part to mean “RISKS OF DIRECT PHYSICAL LOSS unless the loss is 

excluded . . . in: a. Section C. Exclusions . . . of the Deluxe Property Coverage Form; or b. Section B. 

Exclusions and Limitation of the Deluxe Business Income (And Extra Expense) Coverage Form . . .” See

Deluxe Business Income (and Extra Expense Coverage Form (DX T1 01 11 12) at page 2.

Their policy’s Deluxe Property Coverage Form, provides in relevant part:

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C. EXCLUSIONS

1. We will not pay for loss or damage caused directly or indirectly by any of the 

following. Such loss or damage is excluded regardless of any other cause or 

event that contributes concurrently or in any sequence to the loss or damage. 

Exclusions C.1.a through C.1.l. apply whether or not the loss event results in 

widespread damage or affects a substantial area.

***

h. Ordinance or Law

(1) The enforcement of any ordinance or law:

(a) Regulating the construction, use or repair of any 

property; or

(b) Requiring the tearing down of any property, including 

the cost of removing the debris.

(2) This exclusion, Ordinance or Law, applies whether the loss 

results from:

(a) An ordinance or law that is enforced even if the 

property has not been damaged;

***

j. Virus or Bacteria

(1) Any virus, bacterium, or other microorganism that induces or is

capable of inducing physical distress, illness or disease.

(2) With respect to any loss or damage subject to this exclusion, this 

exclusion supersedes any exclusion relating to "pollutants".

***

2. We will not pay for loss or damage caused by or resulting from any of the 

following:

***

b. Consequential Loss

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(1) Delay, loss of use or loss of market; or

(2) Loss of business income or extra expense except as specifically 

provided in this Coverage Part.

***

i. Other Types of Losses

***

(7) The following causes of loss to personal property:

***

(d) Contamination by other than "pollutants";...

***

3. We will not pay for loss or damage caused by or resulting from any of the 

following, 3.a. through 3.c.

***

b. Acts or decisions, including the failure to act or decide, of any person, 

group, organization or governmental body....

***

See Deluxe Property Coverage Form (DX T1 00 11 12) at pages 18-25.

The virus exclusion expressly applies to the Business Income and Extra Expense coverage, Civil Authority 

coverage and Ingress or Egress coverage, as the COVID-19 virus is a virus capable of inducing physical 

distress, illness or disease. Thus, your client’s policy expressly excludes coverage for your claimed loss of 

business income. 

The “Ordinance or Law” exclusion quoted above applies because your client’s claimed loss of business 

income was caused by the Governmental Order “regulating the . . . use” of your client’s property. The 

“loss of use” exclusion” quoted above also applies because your client’s claimed loss of business income 

was caused by the partial loss of your client’s business premises. 

To the extent that your client’s claimed loss of business income was caused by the loss of a market for 

their products and/or services, the “loss of market” exclusion quoted above also applies. To the extent 

that your client’s claim that their loss is caused by or results from alleged contamination of their

premises and/or, with respect to the Civil Authority provision, alleged contamination of property at 

other locations within 100 miles of your premises, their claimed loss of business income is also excluded 

by the exclusion for loss caused by or resulting from “contamination by other than ‘pollutants’” quoted 

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above. The “Acts or decisions” exclusion quoted above also applies to the extent that your client’s

claimed loss of business income was caused by an act or decision of the management of their business 

or any governmental body.

 

Please note that there may be other terms and conditions that apply to your client’s claimed loss. 

Nothing in this letter shall, nor is it intended to, waive any policy terms or conditions that Travelers 

determines are now or in the future relevant to this claim. Travelers expressly reserves the right to deny 

coverage for any valid reason under the policy or at law. 

This decision is based on the currently known information. If you are aware of any new or different 

information or documentation that might lead us to reconsider our decision, please contact me 

immediately.

Please review the Legal Action Against Us condition of your policy as it contains important information 

about the period of time in which you may bring legal action. Enclosed with this letter are additional 

disclosures that may be required in your jurisdiction. 

Although we regret that we were unable to be of additional assistance to you, we hope that this letter 

provides you with a clear understanding of the basis for our conclusion that this loss is not covered.

If you have any questions, please contact us at 1-877-872-8228 or NCCenter@travelers.com.

Sincerely,

Andrew Amadio

Claim Professional

Phone: (877) 872-8228

Fax: (800) 688-1493

Email: nccenter@travelers.com

CC: AJ Gallaher RMS

 2850 Golf Road

 Rolling Meadows, IL 60008

Enclosure

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STATE DISCLOSURES

California

The State of California requires us to provide the following information. 

• Subrogation: We will not pursue recovery of the damages from any parties that may be responsible 

for the claimed loss - pursuing this would be your responsibility.

• If you believe all or part of the claim has been wrongfully denied or rejected, you may have your 

claim reviewed by the California Department of Insurance, Consumer Services Division, 300 South 

Spring Street, South Tower, Los Angeles, CA 90013, (800-927-4357).

• Suit Limitation: Please review the Legal Action Against Us condition which can be found in the 

DELUXE PROPERTY COVERAGE FORM (DX T1 00 11 12), page number 34. This condition states, in 

part, that the time limit for bringing action is 2 years after the date of loss. 

Please note the time between the date this claim was reported to us and the date of a denial of 

coverage is not included in the Suit Limitation period. Please understand that we cannot give advice 

regarding your legal rights. If you have questions regarding the time within which a lawsuit may be 

brought against us, or any other questions about legal rights regarding the policy or this claim, you may 

wish to seek legal counsel at your own expense.

Connecticut 

The State of Connecticut requires us to provide the following information.

Suit Limitation: Please review the Legal Action Against Us condition, which can be found in the DELUXE

PROPERTY COVERAGE FORM (DX T1 00 11 12), page number 34. This condition states in part that the 

time limit for bringing action is 2 years after the date of loss. 

Please note that if your claimed loss occurred over a period of time rather than on one specific date, the 

“date of loss” for purposes of the Suit Against Us provision may not be the date of loss that may be 

shown on correspondence you receive from us regarding your claim. 

Also, please understand that we cannot give advice regarding your legal rights. If you have questions 

regarding the time within which a lawsuit may be brought against us or any other questions about legal 

rights regarding the policy or your claim, you may wish to seek legal counsel at your own expense.

If you do not agree with this decision, you may contact the Division of Consumer Affairs within the 

Insurance Department at the Connecticut Insurance Department, Consumer Affairs Division, P.O. Box 

816, Hartford, CT 06142-0816 or by telephone: (800) 203-3447 (Connecticut only); (860) 297-3900 

(Hartford area or outside of Connecticut). You may contact the Division by e-mail at 

ctinsdept.consumeraffairs@po.state.ct.us.

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Illinois

The State of Illinois requires us to provide the following information.

Part 919 of the Rules of the Illinois Department of Insurance requires that our company

advise you that, if you wish to take this matter up with the Illinois Department of

Insurance, it maintains a Consumer Division in Chicago at 122 S. Michigan Ave., 19th

Floor, Chicago, Illinois 60603 and in Springfield at 320 West Washington Street, Springfield, Illinois 

62767.

Maryland

The State of Maryland requires us to provide the following information.

Having received notice of your claim, we are required by Maryland law to advise you there may be a 

statute of limitations applicable to claims arising out of the insurance contract. Other states laws where 

applicable may vary.

Nebraska

The State of Nebraska requires us to provide the following information.

We are also required to advise you that you may have your claim reviewed by the Nebraska Department 

of Insurance at P.O. Box 82089, Lincoln, NE 68501-2089 (Tel: 402-471-2201 or Toll Free Hotline: 1-877-

564-7323).

State of New Hampshire.

Please review the Legal Action Against Us condition of your policy as it contains important information 

about the period of time in which you may bring legal action. In addition, please be aware that any 

action based upon a denial of coverage shall be barred by law if not commenced within 12 months from 

the date of our written denial of coverage.

The State of New Hampshire requires us to provide the following information. 

We will, of course, be available to you to discuss the position we have taken. You may reach us toll 

free at 1-877-872-8228. If you are a New Hampshire resident; if your policy insures property located in 

New Hampshire; or if you have been injured/your property has been damaged by a New Hampshire 

resident and you wish to take this matter up with the New Hampshire Insurance Department, it 

maintains a consumer services division to assist consumers with complaints at 21 South Fruit Street, 

Suite 14, Concord, NH, 03301. The New Hampshire Insurance Department can be reached, toll free, by 

dialing 1-800-852-3416.

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New Jersey

The State of New Jersey requires us to provide the following information.

NOTICE

CLAIMS INTERNAL APPEAL PROCEDURE

THE FOLLOWING APPEAL PROCEDURE IS AVAILABLE FOR ALL CLAIMS

EXCEPT 

AUTOMOBILE INSURANCE PERSONAL INJURY CLAIMS

New Jersey law and regulation provides claimants with the right to appeal disputed insurance claims 

when the “final” offered claim settlement remains unacceptable to the claimant. A disputed insurance 

claim is any offer of settlement made by the company which is, in whole or in part, rejected or refused 

by the claimant.

In the event that you wish to appeal a disputed claim, you must submit a written request to the 

company at the address shown below. All appeals will be rendered within 10 business days from receipt 

of the appeal provided that no additional information is required of the panel, and a final written 

determination will be mailed to you no later than 3 business days after the final determination is made.

Internal appeals must be sent by United Postal Service, via facsimile transmission or delivered personally 

to the following address to ensure prompt and accurate handling:

Travelers

Attn: Internal Appeals Panel

PO Box 430

Buffalo, NY 14240-0430

Fax: 888-256-3308

Your request must include the basis on which you believe the final offered claim settlement is 

unacceptable and include all supporting documentation you would like reviewed by the company’s 

Internal Appeals Panel prior to rendering their determination.

After the hearing, if you are not satisfied with the final determination rendered by the Internal Appeals 

Panel, you may then appeal the decision to the Office of the Insurance Claims Ombudsman at the 

address below:

Office of the Insurance Claims Ombudsman

Department of Banking and Insurance

P.O. Box 472

Trenton, New Jersey 08625-0472

Telephone: (800) 446-7467

Telefax: (609) 292-2431

E-mail: Ombudsman@dobi.state.nj.us

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New York

Please note, your policy contains a suit limitation period of two years from the date of the loss in which 

to file suit regarding this claim.

The State of New York requires us to provide the following information.

“Should you wish to take this matter up with the New York State Department of Financial Services, 

you may file with the Department either on its website at 

http://www.dfs.ny.gov/consumer/fileacomplaint.htm or you may write to or visit the Consumer 

Assistance Unit, Financial Frauds and Consumer Protection Division, New York State Department of 

Financial Services, at: One State Street, New York, NY 10004; One Commerce Plaza, Albany, NY 12257; 

1399 Franklin Avenue, Garden City, NY 11530; or Walter J. Mahoney Office Building, 65 Court Street, 

Buffalo, NY 14202.”

Rhode Island

The State of Rhode Island requires us to provide the following information:

We will be available to you to discuss the position we have taken. Should you, however, wish to contact 

the Rhode Island Department of Business Regulation, you may do so at the address listed below. In 

certain limited circumstances the Department may have jurisdiction pursuant to R.I. Gen. Laws. § 27-9.1-

6 and therefore, you may be able to have the matter reviewed by the Department. The Department of 

Business Regulation does not have authority to settle or arbitrate claims, determine liability or order an 

Insurer to pay a claim. Rhode Island Department of Business Regulation, Insurance Division, 1511 

Pontiac Avenue, Cranston, RI 02920. The Rhode Island Department of Business Regulation, Insurance 

Division can be contacted by telephone at (401)462-9520. 

Vermont 

Please review the Legal Action Against Us condition of your policy as it contains important information 

about the period of time in which you may bring legal action. In addition, please be aware that any 

action based upon a denial of coverage shall be barred by law if not started within one year after the 

occurrence causing loss or damage.

West Virginia 

The State of West Virginia requires us to provide the following information.

We will, of course, be available to you to discuss the position we have taken but should you wish to 

review our decision with the West Virginia Office of the Insurance Commissioner (WVOIC) you can 

contact them by mail at Consumer Service Division PO Box 50540, Charleston, West Virginia 25305-0540 

via their website at http://www.wvinsurance.gov/ or toll free at 888-879-9842.

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