On August 13, 2020, the U.S. District Court of the Western District of Texas State Farm granted Lloyds ("State Farm") a motion to dismiss a claim for loss of income due to several executive orders requiring the closure of non-essential businesses in Bexar County. , Texas after the COVID-19 pandemic.  The court thus acknowledged that courts in many jurisdictions have found "physical loss" in the absence of concrete destruction of a covered property. However, the court ruled on analogous cases involving pathogens such as E. coli, ammonia and asbestos, where the courts found that there was physical loss.
The insured operated a series of hair salons in the Bexar County area. , who was forced to close at the behest of Judge Wolff. The order required all companies operating in Bexar County to cease operations except those defined as significant in an effort to curb the spread of COVID-1
After the termination of the company's operations, the insured sought coverage under a risky commercial real estate policy for loss of income. State Farm denied the insured's claim that the loss did not constitute 'direct physical loss to covered property' and that the claim was excluded by the insurance's 'fungus, virus or bacteria' exclusion ('Virus exclusion'), alleging that COVID -19 was the cause of the closures, which is a virus.
The Court relied on case law based on insufficient factual scenarios for the current COVID-19 pandemic, such as hurricanes and the 9/11 terrorist attacks, to find that the physical loss did not occur. In addition, the court relied on decisions relating to dissertations such as Couch on Insurance to determine the meaning of "direct physical loss,"  in violation of Texas law on the interpretation of insurance. 
The court further concluded that virus exclusion precludes coverage. The insured claimed that the order was the cause of the loss in question, not the virus, as COVID-19 was not alleged to exist at any of the insured locations. The court recognized that the virus exclusion "could have been worded even more specifically." However, with the loss of the policy 'anti-simultaneous causal language, which extended the scope of virus exclusion to all losses where virus was a contributing cause of the loss, the court found that the exclusion would apply because the termination order was due to the presence of COVID-19.
Although this decision appears to be a benefit to insurance companies in connection with COVID-19 related business closures throughout the county, the decision fails to apply a proper analysis of Texas law regarding "direct physical loss or damage" and does not nor consider the inconsistent and perhaps contradictory petitions to state regulators of insurers about the purpose and extent of virus exemptions such as those contained in State Farm & # 39; s policy. 19-related cases.
 Diesel Barbershop, LLC et al. V. State Farm Lloyds Civ. Case No. 5: 20-cv-00461-DAE (WD Tex. 2020).   See Hartford Ins. Co. of Midwest v. Mississippi Valley Gas Co. 181 F. App & # 39; x 465, 470 (5th Cir. 2006) (“Som en general issue, the property insurance cover is triggered by et t threshold concept of physical loss or damage to the covered property. ”(With reference to 10A COUCH ON INS. § 148: 46 (3d ed. 2005)); see also Ross v. Hartford Lloyd Ins. Co., 2019 WL 2929761, at * 6–7 (ND Tex. 4 July, 2019) ("direct physical loss" requires "a clear, demonstrable, physical change of the property" (with reference to 10A Couch on Ins § 148: 46 (3d ed. 2010)).
 "Terms not defined in a policy acquire their generally accepted or generally understood meaning." Lamar Homes, Inc. v. Mid-Continent Cas Co. 242 SW3d 1, 8 (Tex. 2007).