9th Cir. Finds for Travelers in COVID-19 Business Interruption Coverage Action

SAN FRANCISCO — A 9th Circuit U.S. Court of Appeals panel has affirmed that that a children’s clothing store is not entitled to coverage for COVID-19 business interruption losses from Travelers Insurance Co. because it did not allege “a direct physical loss of” property as required by the policy.

In an Oct. 1 published opinion, the panel held that the policy’s Business Income and Extra Expense coverage is not triggered by mere “loss of use,” as argued by the insured, Mudpie Inc., and that “a distinct, physical alteration of the property” is required.

The panel further ruled that coverage for …