Auto Parts Manufacturers Not Covered for COVID-19 Losses, 7th Cir. Affirms

CHICAGO — A 7th Circuit U.S. Court of Appeals panel has upheld dismissal of a COVID-19 coverage action filed against Factory Mutual Insurance Co. by the manufacturers of auto fuel delivery systems, affirming they did not sustain “physical loss or damage” to covered property.

On March 2, the panel agreed with the U.S. District Court for the Southern District of Indiana that a policy provision based upon "physical loss" is triggered when a loss from a physical alteration to the insured property has occurred, rather than for a reduction in the usefulness of the property due to its inability or …