Wash. Federal Judge Dismisses COVID-19 Coverage Actions for Lack of Physical Loss

SEATTLE — A Washington federal judge has ruled that an athletic club and a daycare are barred from recouping COVID-19 economic losses from their insurers because they did not sustain “direct physical loss or damage to property,” as required by their policies.

In a Sept. 22 order, Judge Barbara Rothstein of the U.S. District Court for the Western District of Washington ruled that the “physical loss,” which is required by the policies issued by Allied World Surplus Lines Insurance Co. and Philadelphia Indemnity Insurance Co., does not include “loss of use.”

Hot Yoga Inc. and Wellington Athletic Club Inc. each …