Hotel Owner’s COVID-19 Business Interruption Coverage Action Dismissed in Minn.

MINNEAPOLIS — A Minnesota federal judge has dismissed a COVID-19 business interruption action filed by a hotel franchise owner, ruling that it failed to allege that government closure orders issued in response to the pandemic caused it to sustain “direct physical loss.”

On Feb. 17, Judge Paul A. Magnuson of the U.S. District Court for the District of Minnesota concluded that “mere loss of use or function” of the insured properties does not constitute “direct physical loss or damage” within the meaning of the policy, issued by Continental Casualty Co.

Torgeson Properties Inc. owns 40 hotels, restaurants, and event …