Ore. Resort Not Covered for COVID-19 Losses, Ore. Federal Judge Rules

PORTLAND, Ore. — A federal judge has ruled that an Oregon hotel and spa cannot recoup COVID-19-related losses from Westchester Surplus Lines Insurance Co. because government closure orders did not cause it to sustain “direct physical loss or damage” as required by the policy.

In a March 4 order, Judge Michael W. Mosman of the U.S. District Court for the District of Oregon adopted Magistrate Judge Youlee Yim You’s findings that purely economic damages are not covered under the policy because property must be physically changed for coverage to be triggered.

Fortuna Cannery LLC sued Westchester after the insurer denied …