Strip Clubs Lose Bid for COVID-19 Coverage on Appeal to 9th Circuit

SAN FRANCISCO — The owners of 23 strip clubs and one “adult superstore” lost their appeal in a COVID-19 coverage action after a 9th Circuit U.S. Court of Appeals panel held that government closure orders issued in response to the pandemic did not cause “direct physical loss” to their properties.

In an April 20 memorandum, the panel affirmed there cannot be “physical loss” unless there is a “physical alteration of the property,” or an external force caused a “physical change in the condition of the property.”

Plaintiffs suspended operations in March 2020 in compliance with government closure orders issued in …