ICYMI: Texas Court Agrees That COVID-19 Does Not Cause Direct Physical Property Damage
August 26, 2020

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 FloridaMichigan, and the District of Columbia

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