Two years after sweeping lockdowns went into effect to prevent the spread of COVID-19, case law is mounting in favor of insurers that were sued for denying claims.

A California federal judge on Wednesday definitively rejected Creative Artists Agency’s suit against Affiliated FM Insurance for refusing to cover losses tied to business closures forced by the virus. Following a long line of precedent, U.S. District Judge Andre Birotte Jr. found that policies for “direct physical loss or damage” don’t cover pandemic-related policy claims.

When local governments started to issue stay-at-home orders in 2020, billions of dollars worth of claims — many from companies in the entertainment and live-event business — poured in across the country. But instead of paying out, insurers looked to the fine print and denied en masse. The industry collectively found that business interruption policies for lost revenue excluded coverage for pandemic closures, claiming that physical loss or damage to property was required. A legal war erupted: More than 2,300 lawsuits challenging coverage decisions have been filed, according to a COVID-19 insurance litigation tracker created by Penn Law professor Tom Baker. Nearly 92 percent, or 792 of 862 cases that were considered for dismissal, have been tossed.

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The fate of CAA’s lawsuit, like others, swung on whether there was “physical loss” to insured properties. The agency claimed its losses were a “direct result of physical loss and damage” based on civil authority closure orders. The physical presence of the virus in the air and on surfaces, it said, made its premises unfit for use.

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Birotte rejected the argument, finding that CAA failed to specifically identify how virus particles caused a “physical alteration” to its buildings. “For example, some external force must have acted upon the insured property to cause a physical change in the condition of the property,” he wrote.

In Inns of the Sea v. California Mutual Insurance Co., the first case before the California appeals court involving a COVID-19 coverage dispute, it was found that Inns also failed to identify any direct physical damage to property that caused it to suspend operations despite allegations that the virus was present on its premises.

United Talent Agency’s nearly identical suit against its insurer, Vigilant Insurance, ended the same way. “In the wake of the COVID-19 pandemic, many insureds have asserted arguments similar to UTA’s, and the majority of courts have rejected them,” reads an April order from a state appeals court affirming dismissal of the case. “It is now widely established that temporary loss of use of a property due to pandemic-related closure orders, without more, does not constitute direct physical loss or damage.”

The judge also denied that there’s coverage under a provision in CAA’s policy allegedly covering business interruption losses incurred by civil authority orders. The orders were issued to prevent the spread of COVID-19, Birotte found, not as a result of physical damage to property.

Regardless, CAA had a provision in its policy excluding coverage of “any cost due to contamination including the inability to use or occupy property or any cost of making property safe or suitable for use or occupancy.”

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CAA can’t dispute that the civil authority closure orders were issued in response to COVID-19 and that the virus is the “efficient proximate” cause of the loss incurred, Birotte found. “Several courts within this district have held that similar Contamination Exclusion provisions bar coverage even if plaintiffs are able to show that they suffered ‘physical loss of or damage to’ their premises,” the order reads.

The agency wasn’t given an opportunity to fix its claims because it failed to identify any additional allegations they could include in an amendment to salvage the suit, “especially when considering the binding precedent rejecting their claims.”

There have been 73 lawsuits filed by companies in the live arts and sports industry, according to the COVID-19 insurance litigation tracker.

CAA declined to comment. Affiliated and its attorneys didn’t respond to requests for comment.

CAA, Affiliated and their attorneys didn’t respond to requests for comment.

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