U.S. District Judge Stephen V. Wilson ruled on Friday, August 28, that a downtown Los Angeles restaurant was not entitled to business interruption (BI) coverage for income lost during the Los Angeles shutdown order that closed nonessential businesses on March 15. 

Judge Wilson sided with the insurer in his ruling because the Los Angeles restaurant did not experience “direct physical loss of or damage to property” under California law. 

“‘An insured cannot recover by attempting to artfully plead impairment to economically valuable use of property as physical loss or damage to property,’ Wilson said, adding that [the plaintiff] has only plausibly alleged that in-person dining restrictions interfered with the use or value of its property — ‘not that the restrictions caused direct physical loss or damage.'”

This ruling adds California to the list of states siding with insurers on the grounds of similar findings, including Texas, Florida, Michigan, and the District of Columbia. 

You can read the full article on Law360 here.

For more information, please visit fairinsure.org.