N.Y. Federal Judge Says ‘Direct Physical Loss’ Requires “Tangible” Damage

NEW YORK — A federal judge has dismissed a Manhattan restaurant owner’s COVID-19 coverage action, rejecting its argument that the policy’s requirement of “direct physical loss” includes “loss of use” of the insured premises caused by government shutdown orders.

In a June 23 order, Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York concluded that “tangible loss” of covered property is required to trigger coverage under the policy, issued by XL America Inc.

Broadway 104 LLC operates Café du Soleil, a small family-owned restaurant that suspended operations beginning in March 2020 following government …