Insurance: Property Insurance-Presence of COVID-19-Physical Loss

Plaintiff appealed the district court’s grant of defendant’s motion to dismiss. Plaintiff filed suit after defendant denied plaintiff’s property insurance claim to recover business losses stemming from shutdown orders during the COVID-19 pandemic. The district court concluded that plaintiff had failed to plead a “physical loss” that would entitle it to coverage. On appeal, plaintiff asserted that its facility was contaminated by the SARS-CoV-2 virus, which constituted the requisite physical loss.

Where viral contamination had no physical effect on a property, the fact that plaintiff’s premises allegedly were contaminated by the virus that causes COVID-19 was insufficient to demonstrate that plaintiff suffered a “physical loss” of property entitling it to insurance coverage.

Judgment is affirmed.

Olmstead Medical Center v. Continental Casualty Company (MLW No. 79796/Case No. 22-1256 – 11 pages) (U.S. Court of Appeals, 8th Circuit, Grasz, J.) Appealed from U.S. District Court, District of Minnesota, Davis, J. (Christopher Yetka, of Minneapolis, MN, and Sarah D. Greening, of Minneapolis, MN, for appellant) (Louise A. Behrendt, of Minneapolis MN, Kannon K. Shanmugam, of Washington, DC, Julia J. Nierengarten, of Minneapolis, MN, H. Christopher Boehning, of New York, NY, and Brian M. Lipshutz, of Washington, DC, for appellee)