Earlier this month, a Texas federal court sided with an insurance company’s motion to dismiss a lawsuit by a policyholder, finding that there was no coverage for plaintiffs’ claims for business interruption (BI) COVID-19 losses.
As outlined in a National Law Review article yesterday, in his decision, Senior U.S. District Judge David Ezra agreed with what insurance companies have been showing for months: COVID-19 does not cause direct physical damage to property.
The court held that plaintiffs failed to prove they had incurred a direct physical loss, that the virus exclusion included in the policy barred policyholders’ claims, and that the Civil Authority provision in the policy was not triggered.
The judge made a couple of very important points in his decision:
The Texas Court joined a chorus of states recently siding with insurers on the grounds of similar findings, including Florida, Michigan, and the District of Columbia.
For more information, please visit fairinsure.org.