Calif. Federal Judge Dismisses Marketing Agency’s COVID-19 Coverage Action

SAN FRANCISCO — A California federal judge has dismissed a marketing agency’s COVID-19 business interruption coverage action against Transportation Insurance Co., finding it failed to show it sustained “direct physical loss” to insured property as required by the policy.

In a Jan. 12 order, Judge Maxine M. Chesney of the U.S. District Court for the Northern District of California rejected O’Brien Sales & Marketing Inc.’s argument that there is a “physical loss” of property when it can no longer be used for its intended purposes.

“The California Court of Appeal has interpreted ‘direct physical loss’ to require a ‘distinct, demonstrable, …