N.Y. Hospital System Loses Battle for Coverage of COVID-19 Economic Losses

NEW YORK — A federal judge has dismissed a COVID-19 coverage action filed by New York’s largest hospital system against Lexington Insurance Co. and Interstate Fire & Casualty Co., ruling there was no “direct physical loss of or damage” to insured property.

In a July 26 order, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York said Northwell Health Inc. failed to adequately allege that COVID-19 “compromises the physical integrity of objects by harming surfaces and structures, as opposed to harming the people who touch them.”

As an essential business, Northwell was permitted to …