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Terry Black’s Barbecue, L.L.C. v. State Automobile Insurance Co.

Court: 5th Cir  01/05/2022  Fifth Circuit Holds COVID-19 Business Interruption Losses Not Covered Under Commercial Property Policy

The Fifth Circuit Court of Appeals under an "Erie guess" affirmed dismissal by the district court of claims by insured restaurant for business interruption losses resulting from COVID-19 government shutdown orders, finding coverage under commercial property policy was limited to suspension of operations "caused by direct physical loss of or damage to property at the premises" but that "nothing physical or tangible happened to [the insured's] restaurants at all" where physical loss requires a "distinct, demonstrable, physical alteration of the property," and further held that the policy's "restaurant extension endorsement" did not provide coverage for the losses because the shutdown orders did not result from "the actual or alleged exposure of the...premises to a contagious or infectious disease" as required by the policy, and "perceiv[ing] no set of facts in which [the insured] states a covered claim for its losses" held that the district court did not err in denying leave to amend.

commercial property policy, motion to dismiss, FRCP 12(c), COVID-19, shutdown order, business interruption losses, Erie, direct physical loss of or damage to property, restaurant extension endorsement

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