Virus Exclusion Bars Coverage for Retailers’ COVID-19 Losses, 9th Cir. Affirms

SAN FRANCISCO — A 9th Circuit U.S. Court of Appeals panel has upheld dismissal of a COVID-19 coverage action filed by a group of retail businesses against Wesco Insurance Co., affirming that their policies’ virus exclusion applies to their losses.

In a Feb. 15 memorandum, the panel explained that while it is unsettled whether COVID-19 related losses might be covered as “direct physical loss or damage,” the virus exclusion bars coverage because it clearly encompasses “any virus.”

The policyholders sued Wesco after it denied their claims for coverage of business interruption losses caused by the COVID-19 pandemic and related government …