Dist. Ct. did not err in dismissing plaintiff-insured’s action, seeking declaration that defendant-insurance company’s policy covered claims for lost business that arose out of Governor of North Carolina’s imposition of state-wide closures of plaintiff’s movie theaters in response to COVID-19 pandemic. Dist. Ct. could properly find that instant losses were not covered under defendant’s policy, where plaintiff failed to allege any physical alteration or damages to its property. Moreover, Ct. of Appeals found that mere loss of use of property due to COVID-related closures does not constitute direct physical loss as required under policy when said losses were not accompanied by any physical alteration to property. Ct. also rejected plaintiff’s argument that mere presence of virus on surfaces of plaintiff’s property constituted physical alteration of its property.
Federal 7th Circuit Court
Civil Court
Insurance