Dallas Restaurant Group’s COVID-19 Coverage Action Tossed for Good

DALLAS — A Texas federal judge has dismissed with prejudice a Dallas restaurant group’s COVID-19 business interruption coverage action, ruling that it failed to show that its properties sustained “direct physical loss or damage” as required by the policy.

On July 13, Judge Sidney Fitzwater of the U.S. District Court for the Northern District of Texas granted Cincinnati Insurance Co.’s motion to dismiss Vandelay Hospitality Group LP d/b/a Hudson House’s second amended petition, explaining that contamination by a virus cannot trigger coverage because it can be removed without lasting damage.

“In Vandelay’s view, the presence of any contagious virus — …