{"id":197383,"date":"2025-04-21T21:31:09","date_gmt":"2025-04-21T21:31:09","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/legal\/covid-claims-and-physical-loss-missouri-court-reaffirms-tangibility-requirement-for-business-interruption-coverage\/"},"modified":"2025-04-21T21:31:09","modified_gmt":"2025-04-21T21:31:09","slug":"covid-claims-and-physical-loss-missouri-court-reaffirms-tangibility-requirement-for-business-interruption-coverage","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=197383","title":{"rendered":"COVID Claims and \u201cPhysical Loss\u201d: Missouri Court Reaffirms Tangibility Requirement for Business Interruption Coverage"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>Can the presence of COVID-19 on a property trigger <a href=\"https:\/\/sandbergphoenix.com\/service\/insurance-coverage-bad-faith\/\">insurance coverage<\/a> for \u201cdirect physical loss or damage\u201d under coverage provisions contained within a Master Policy of Insurance for Business Interruption? \u00a0Not under Missouri law, according to the <a href=\"https:\/\/www.courts.mo.gov\/page.jsp?id=227\">Western District Court of Appeals<\/a> in <em>BBX Capital Corporation v. Scottsdale Insurance Company<\/em> (WD 86632). The decision adds clarity\u2014and finality\u2014to a now-settled question: losses resulting from business interruption and caused by physical loss, damage or destruction under \u201call-risk\u201d policies requires more than contamination or government shutdowns. The loss requires a tangible and physical alteration to property for coverage.<\/p>\n<p>The case involved a nationwide business operator\u2014vacation resorts, retail stores, and timeshare properties\u2014that sought insurance coverage for business losses allegedly caused by the presence of COVID-19 and resulting government-ordered closures. The insured claimed that its properties became unfit for use due to virus particles lingering on surfaces and in the air, arguing that presence of the virus constituted \u201cdirect physical loss or damage\u201d under its all-risk insurance policies.<\/p>\n<p>The trial court granted judgment on the pleadings in favor of the insurers finding that insured\u2019s claims based upon direct physical loss or damage failed as a matter of law. The Western District affirmed.<\/p>\n<p>The focus of the Western District\u2019s analysis was the phrase \u201cdirect physical loss of or damage to\u201d property. Because this phrase was not defined in the policy, the Court interpreted the words according to their plain and ordinary meaning. Relying on dictionary definitions and applying a definition consistent with several federal cases applying Missouri law, the Court concluded that the phrase \u201cdirect physical loss of or damage\u201d required a tangible, perceptible impact on the insured\u2019s property \u2014one that physically alters the property.<\/p>\n<p>The insured argued that the virus\u2019s presence made its properties uninhabitable and unsafe, thereby triggering coverage. But the Court found that such limitations on use\u2014even when caused by government mandates or public health concerns\u2014did not satisfy the requirement of physical alteration or tangible impact. Insured\u2019s petition contained no allegations that the virus damaged surfaces or structural elements of any property, or that any part of the properties required repair, rebuilding, or replacement as a result of the virus.<\/p>\n<p>The insured cited some Missouri cases and federal court decisions addressing the presence of viral particles on property in an attempt to establish an ambiguity in the interpretation of the pertinent policy language, and thereby benefit from the application of Missouri law that an ambiguity found in an insurance policy will be resolved in favor of the insured period.\u00a0 The Court rejected the insured\u2019s argument that the policy language was ambiguous citing the \u201cunconvincing nature of the cases\u201d cited by insured. \u00a0The Western District found no divergence in Missouri law with regard to it\u2019s analysis and found nothing ambiguous about the term \u201cdirect physical loss of or damage to\u201d property as used in the policies. Quoting precedent from the Missouri Supreme Court, the Court explained that it would not \u201cdistort\u201d clear policy language to create ambiguity where none exists.<\/p>\n<p>Ultimately, the Western District joined the majority of courts nationwide that have concluded the presence of COVID-19 does not constitute \u201cdirect physical loss or damage\u201d as required to trigger business interruption coverage under similarly worded policies.<\/p>\n<p>This case reinforces the importance of precise policy language and underscores the narrow interpretation Missouri courts apply to \u201cphysical loss\u201d provisions\u2014particularly when weighed against claims arising from intangible or environmental factors like viral contamination.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Can the presence of COVID-19 on a property trigger insurance coverage for \u201cdirect physical loss or damage\u201d under coverage provisions contained within a Master Policy of Insurance for Business Interruption? \u00a0Not under Missouri law, according to the Western District Court of Appeals in BBX Capital Corporation v. Scottsdale Insurance Company (WD 86632). The decision adds [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":197384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[97],"tags":[907,11693,410,13841,15043,25036,8681,35073,20553,29284,17817,76156],"dealstore":[],"offerexpiration":[],"class_list":["post-197383","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","tag-business","tag-claims","tag-court","tag-coverage","tag-covid","tag-interruption","tag-loss","tag-missouri","tag-physical","tag-reaffirms","tag-requirement","tag-tangibility"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>COVID Claims and \u201cPhysical Loss\u201d: Missouri Court Reaffirms Tangibility Requirement for Business Interruption Coverage - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=197383\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"COVID Claims and \u201cPhysical Loss\u201d: Missouri Court Reaffirms Tangibility Requirement for Business Interruption Coverage - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Can the presence of COVID-19 on a property trigger insurance coverage for \u201cdirect physical loss or damage\u201d under coverage provisions contained within a Master Policy of Insurance for Business Interruption? \u00a0Not under Missouri law, according to the Western District Court of Appeals in BBX Capital Corporation v. Scottsdale Insurance Company (WD 86632). 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