Texas Hotel, Restaurant Developer Loses Battle for COVID-19 Coverage in Federal Court

HOUSTON — A Texas-based hotel and restaurant developer lost its battle for COVID-19 coverage when a federal judge ruled that it failed to allege “physical loss or damage” to covered property, as required by the policy.

On July 11, Chief Judge Lee Rosenthal of the U.S. District Court for the Southern District of Texas found American Liberty Hospitality did not sustain “tangible alteration or deprivation of property,” as required for coverage under Texas and Louisiana law.

American Liberty Hospitality develops restaurants and hotels in Texas and Louisiana. In March 2020, governors of those states issued stay-at-home orders in response to …