The District of Columbia Court of Appeals on Thursday became the latest — and final — federal appeals court to rule against policyholders seeking to recover losses from COVID-19-related business interruptions.
A group of restaurants and bars had filed suit against Erie Insurance Exchange, a unit of Erie, Pennsylvania-based Erie Insurance Group, seeking coverage under its Erie Ultrapack Plus insurance package, according to the ruling in Rose’s 1, LLC et al., v. Erie Insurance Exchange.
A three-judge panel affirmed a Washington, DC, Superior Court decision denying the plaintiff coverage. “Like other courts, we are tasked with determining whether plaintiffs have alleged a “direct physical loss of or damage to the covered property.”
;We find that they have not, the ruling said.“If we take the policy at face value … we conclude that the loss of covered property must be tangible and material. There must be appreciable, physical change or change,” it said, citing previous rulings.
“Plaintiffs have not alleged a substantial change or alteration to their properties, and therefore have not shown ‘physical loss of or damage to Covered Property’ as required by the policy,” the lower court affirmed.
The last federal appeals court to rule against policyholders was the Third U.S. Circuit Court of Appeals in Philadelphia in January.
In January, Connecticut’s Supreme Court joined state supreme courts in Delaware, Iowa, Maryland, Massachusetts, Ohio, Oklahoma, South Carolina, Washington and Wisconsin to also rule in favor of insurers in comparable cases, with only Vermont’s Supreme Court ruling in favor of the policyholder so far .
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