Calif. Federal Judge Dismisses Hawaiian Gift Shop’s COVID-19 Coverage Action

SAN FRANCISCO — A California federal judge has dismissed a Hawaiian gift shop chain’s COVID-19 business interruption action, ruling that the complaint does not adequately allege “direct physical loss or damage” to property as required by the policy.

On Nov. 9, Judge William H. Orrick of the U.S. District Court for the Northern District of California found that Water Sports Kauai Inc. d/b/a Sand People failed to present sufficient evidence of the presence of COVID-19 at its insured properties.

The judge agreed with defendants Fireman’s Fund Insurance Co., National Surety Corp. and Allianz Global Risks Insurance Co. that the …