Judge's gavel coming down on a pile of money. The court decided that direct physical loss or damage could be shown without evidence of a physical alteration in the insured property. (Photo courtesy of Bigstock)

The California Court of Appeal has reversed the trial court’s granting of demurrer and found that an insured adequately pled a claim of direct physical loss or damage due to the presence of the COVID-19 virus on an insured property. The case is Marina Pacific Hotel & Suites, LLC v. Fireman’s Fund Ins. Co., No. B316501, 2022 Cal. Ct. App. (Ct. App. July 13, 2022).

Fireman’s Fund insurance company issued a commercial property policy to Mariana Pacific Hotel and Suites for the time period between July 1, 2019, and July 1, 2020, that provided coverage for direct physical loss or damage to the insured property. The policy provided business interruption coverage with a $22 million limit for the “actual loss of business income and necessary extra expense you sustain due to necessary suspension of your operation during the period of restoration arising from direct physical loss or damage to property.”

 

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