Va. Beach Spa Pled ‘Direct Physical Loss’ Caused by COVID-19 Orders, Federal Judge Rules

NORFOLK, Va. — A federal judge has refused to dismiss a Virginia Beach massage clinic’s COVID-19 business interruption coverage action, finding it has plausibly alleged that its property sustained “direct physical loss” as required by the policy.

In a Dec. 9 order, Judge Raymond Jackson of the U.S. District Court for the Eastern District of Virginia noted the phrase “direct physical loss” has been subject to several interpretations; therefore, it is possible that the spa experienced a “direct physical loss” when government orders deemed it uninhabitable, inaccessible and dangerous due to its high risk for spreading COVID-19.

The …