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Apple Annie Suffered no Direct Physical Damage 

 It\'s Time to Quit Trying to Get Business Interruption Payments from  Insurers for Covid  The COVID pandemic and ensuing lock down have generated a host of legal  issues. One of the most momentous, in terms of the potential monetary  liability, is whether businesses ordered by government decree to close  or suspend operations could get compensation under the business income  coverage of the standard comprehensive commercial liability policy.  In Apple Annie, LLC v. Oregon Mutual Insurance Company, A163300,  California Court of Appeals, First District, Second Division (September  2, 2022) the California Court of Appeal refused to be swayed by the  Marina Pacific decision.  

BACKGROUND   Apple Annie, LLC, operated restaurants in Marin, San Francisco, and  Santa Barbara counties. Defendant Oregon Mutual Insurance Company issued  Apple Annie a comprehensive commercial liability and property insurance  policy that, as relevant here, promised in general to "pay for direct  physical loss of or damage to Covered Property at the [insured]  premises," and in particular to "pay for the actual loss of Business  Income you sustain due to the necessary suspension of your \'operations\'  during the \'period of restoration. The suspension must be caused by  direct physical loss of or damage to property at the described premises.  The loss or damage must be caused by or result from a Covered Cause of  Loss."  

DISCUSSION  After a comprehensive survey of the subject, the court concluded that a  business that closed pursuant to a government shut-down order had not  suffered "direct physical . . . damage to" the business\'s property. This  was a matter of plain English:  The presence of COVID-19 on Plaintiff\'s property did not cause damage to  the property necessitating rehabilitation or restoration efforts  similar to those required to abate asbestos or remove poisonous fumes  which permeate property. Instead, all that is required for Plaintiff to  return to full working order is for the [government orders and  restrictions to be lifted.  By contrast, the losses here arose from closures intended to limit the  spread of a virus that can carry great risk to people but no risk at all  to a physical structure.