Unanimous Nevada Supreme Court Rules There Is No Commercial Property Coverage for COVID-19 Economic Losses Without Physical Loss or Damage
By Melinda S. Kollross
The Nevada Supreme Court adds its voice to the unanimous views of other state high courts nationwide as well as other lower courts and holds that there is no business interruption coverage for economic losses caused by the COVID-19 pandemic. Starr Surplus Lines Ins. Co. v. Eighth Jud. Dist. Ct., 2023 Nev. LEXIS 31 (9-14-23).
According to the Court, the insured did not make a showing of the “direct physical loss or damage to covered property” required to establish coverage under the commercial property insurance policy. The Court found that the fact that the COVID-19 virus was present in or on the property did not establish that there was any physical harm to the property. In any event, according to the Court, because the policy’s pollution and contamination exclusion applied to a “virus,” even if the insured’s losses would otherwise be covered, those losses resulting from COVID-19 would be excluded from coverage. The Court stated that while it was sympathetic to the economic woes the insured and other businesses suffered because of the COVID-19 pandemic, the insured had no claim for coverage under this type of insurance policy.
The Nevada Supreme Court noted that in making this ruling, it was joining a striking majority of over 800 cases nationwide that have likewise so ruled.