On March 16, 2022, the Ninth Circuit joined other appellate courts in finding that restaurants were not entitled to insurance coverage for losses due to COVID-19 pandemic closures. A panel of judges issued a unpublished review upholding the opinion of a district court that the pandemic and pandemic-related stop orders did not cause direct physical loss or damage within the meaning of the insurance policy at issue.
The case, Steven Baker v. Oregon Mutual Insurance Co., 21-51097, is appealing from the San Francisco District Court. The plaintiff was a San Francisco coffee shop seeking insurance coverage from its commercial property insurance provider, Oregon Mutual Insurance. The District Court granted the motion to dismiss the claim under Rule 12(b)(6), finding there was no coverage as there was no physical loss or damage directly within the meaning of the insurance policy.
Ninth Circuit panel reviewed lower court order de novo. The committee concluded that a case from the California State Court of Appeals, Inns by the Sea v California Mutual Insurance Co., 286 Cal. Rptr. 3d 576 (Cal. Ct. App. 2021) was the controlling authority. In that case, the court ruled that the wording of the commercial property insurance policy at issue did not cover loss of business revenue caused by COVID-related closure orders. Applying the state court’s interpretation of California law, the panel found that the losses at issue were not physical loss or damage and were not covered by the cafe’s insurance policy.
Other appellate courts to adjudicate similar coverage disputes have also found no coverage on similar grounds, leaving restaurants to bear the cost of pandemic-related losses and closures without the help of insurance policies. commercial.