The court debated whether an underlying suit based on environmental harms committed by a commercial property owner could be considered an "occurrence" that triggered the duties of defense and indemnity.
The justices were guided by a 2020 decision related to an identical policy where the court found the term "physical abuse" as used in the exclusion was ambiguous.
The insurance policy phrase "direct physical loss of or damage to" has been in the news the past few years thanks to BI cases stemming from the pandemic.
Virginia's Supreme Court on Oct. 31 overturned a jury decision that found Virginia Tech University negligent in the 2007 massacre at the school in which 32 people were killed.