‘No Direct Physical Loss’ Thwarts Ill. Restaurant Owner’s Bid for COVID-19 Coverage

SPRINGFIELD, Ill. — An Illinois federal judge has dismissed a COVID-19 coverage action filed by the owner of two food and beverage establishments, ruling that coverage is not available because there was no “direct physical loss” to property, as required by the policy.

In a Jan. 25 order, Judge David W. Dugan of the U.S. District Court for the Southern District of Illinois agreed with The Cincinnati Insurance Company Inc. that the policy issued to TJBC Inc. clearly requires some form of actual “tangible, material loss” or a demonstrable, physical alteration to a property’s structure.

“In sum, because COVID-19 does …