Hawaiian Gift Shop Failed to Plead ‘Direct Physical Loss or Damage,’ Insurers Contend

SAN FRANCISCO — Insurers have moved to dismiss a Hawaiian gift shop chain’s lawsuit seeking to recoup business interruption losses arising from the COVID-19 pandemic and related government closure orders, arguing there was no “direct physical loss or damage” to property as required by the policy.

In an Aug. 17 motion filed in the U.S. District Court for the Northern District of California, Fireman’s Fund Insurance Co., National Surety Corp. and Allianz Global Risks Insurance Co. contend that coverage is not available under the policy issued to Water Sports Kauai Inc. d/b/a Sand People.

“Put simply: no amount of artful …