Insurers received their third straight victory on Thursday in cases where COVID-19 allegations of business interruption when a District Court judge ruled that the forced closure of a dozen restaurants in Washington did not constitute a direct physical loss.
The restaurants in the case Rose & # 39 ;s 1 LLC et al v. Erie Insurance Exchange filed in the state court in the district in May, include several Michelin-starred establishments, such as pineapples and pearls, and Gravitas .  The restaurants claimed they owed lost revenue and associated expenses from Erie, Pennsylvania-based insurance company, because Washington's March lock-in order meant they lost the ability to operate their eating establishments in restaurants, which constituted a "direct physical loss "and triggered coverage of business interruptions during their policies.
Court Judge Kelly A. Higashi disagreed and issued a summary judgment in favor of Erie Insuranc e.
In the decision, the judge analyzed the term "direct physical loss."
According to the decision, the mayor's order affected "no direct changes to the properties." the order "did not affect the material structure or material structure of the insured properties." and since "direct" and "physical" modify the word loss, therefore, loss of use must be caused by "a direct physical intrusion," which the orders did not constitute.
Judge Higashi also said that none of the cases cited as precedents by the appellants supported the proposal that a system of government constitutes a direct physical loss. Several of the cases in the suit have been cited in some of the many other cases filed in state and federal courts across the country by commercial policyholders seeking coverage of business interruptions for COVID-1
A lawyer for the restaurants did not respond immediately to a request for comment.
Last month, a Michigan state court also ruled for an insurance company in a COVID-19 case filed by a restaurant owner, and in May, a judge in New York ruled in favor of an insurance company in a suit filed by a newspaper publishers. The publisher filed an appeal, which was later withdrawn.
More insurance and risk management news about the coronavirus crisis here .