California Hotel Owners Not Covered for COVID-19 Losses, 9th Cir. Affirms

SAN FRANCISCO — The owners of eight California hotels cannot recoup COVID-19-related economic losses from Hartford Fire Insurance Co. because they did not sustain “direct physical loss of or damage” to property, the 9th Circuit U.S. Court of Appeals has affirmed.

On Oct. 21, the appellate panel agreed with the U.S. District Court for the Central District of California that government stay-at-home orders issued in response to the pandemic do not physically alter property, which is required to trigger coverage.

Hartford insured properties owned by BA LAX LLC, Candleberry Properties LP, Sun Beverly LLC, Sunstone Century LLC, SVI Airport LLC, …