The Growing Science Behind Direct Physical Loss or Damage from COVID-19

Across the country, policyholders and their insurers are locked in battle over whether COVID-19 implicates direct physical loss or damage under the meaning of commercial property policies. To date, insurers have routinely denied coverage for such claims without any investigation into whether COVID-19 implicates direct physical loss or damage from a scientific perspective. Instead, insurers have taken the unsubstantiated position that COVID-19 only causes intangible damage, if any, to covered property.

Specifically, insurers claim COVID-19 exposure does not implicate commercial property coverage triggered by “direct physical loss or damage” in that such exposure supposedly does not cause a tangible, material change or alteration to insured property. Instead, they say, it represents intangible alleged damage that can be readily addressed by disinfection.  Separate and apart from the fact that case law does not uniformly support the insurers’ position on the meaning of direct physical loss or damage, the growing science on COVID-19 shows that COVID-19 does in fact implicate direct physical loss or damage to insured property in multiple respects and cannot be addressed by mere efforts at disinfection.

In fact, the latest scientific studies confirm COVID-19 exposure does in fact cause tangible physical alteration of insured property by, among other things, adhering to cells of surfaces via surface proteins and turning them into vectors of infection called “fomites.”

Scientists have also gained a better understanding of the manner in which COVID-19 attaches and thus damages covered property. A January 2021 study titled “Surface interactions and viability of coronaviruses” notes that “[t]he physico-chemical adherence and the persistence of SARS-CoV-2 differ with the characteristics of the inanimate surfaces and the virus outer surface proteins, as well as on the surrounding environmental conditions, such as air temperature, relative humidity (RH) and sunlight.”

Furthermore, a June 2020 study showed that disinfection is not necessarily effective in eradicating COVID-19, let alone effective in situations where COVID-19 is continually reintroduced to insured properties. 

When faced with a coverage denial and a looming deadline to sue, policyholders should not take insurers at their word that COVID-19 does not implicate direct physical loss or damage. They can instead consult with coverage counsel to discuss their options in light of the developing science on COVID-19.

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