The insured's claim for business interruption losses due to COVID-19 was dismissed for failure to plead direct physical loss of or damage to property. Malaube LLC v. Greenwich Ins. Co., 2020 U.S. Dist. LEXIS 156027 (S.D. Fla. Aug 26, 2020).

    The insured restaurant had to suspend operations when local and state orders closed all onsite dining due to COVID-19. The insured submitted a claim for business interruption losses to its carrier. Greenwich denied the claim because the insured did not experience any physical loss or damage to the insured property. The insured sued. 

    Greenwich moved to dismiss the complaint because it only provided coverage for actual loss of business income if a direct physical loss or damage to the property caused a suspension to the insured's operations. There were no allegations that the insured property ever suffered a direct physical loss or damage. The insured equated the closure of its indoor dining to a physical loss because the business could no longer operate for its intended purpose.

    The court compared the allegations here to those made by the insured in Studio 417, Inc. v. Cincinnati Ins. Co., 2020 U.S. Dist. LEXIS 147600 (W.D. Mo. Aug 12, 2020) [prior post is here]. There, the court denied the insurer's motion to dismiss because the insureds' alleged that COVID-19 was a highly contagious virus that was physically present in viral fluid particles and deposited on surfaces and objects. In contrast, here there was no allegation that COVID-19 was physically present on the premises. 

    Other provisions in the policy supported the same interpretation. The Business Income and Extra Expense provisions provided for coverage for an insured's operations during a "period of restoration." A period of restoration was defined to end after the property was repaired or replaced. The words "repair" and "replace" contemplated physical damage to the insured premises as opposed to loss of use of it. 

    Therefore, Greenwich's motion to dismiss was granted. The insured, however, was given leave to amend its complaint.