Insurers have succeeded in dismissing COVID-19 business interruption lawsuits in 17 out of 23 cases heard so far, with a growing number of judges finding that some tangible alteration of a property is required to trigger coverage under commercial property policies.

Motions to dismiss were denied in six cases, with three of those rulings from the same judge.

“No one expected every court in the country to grant all of these early motions to dismiss,” said attorney Steven Badger, who defends insurers for the Zelle law firm. “That is an obvious trend showing that in the vast majority of these cases there was no credible argument for coverage.”

In a ruling on Tuesday, U.S. District Court Judge Charles R. Wolle in Des Moines, Iowa became one of the latest judges to find no merit to arguments that a government closure order by itself constitutes a “direct physical loss” to a property. He dismissed with prejudice a lawsuit filed by Oral Surgeons P.C. against Cincinnati Insurance Co.

Judge Wolle did not get into details in his two-page order, but other judges have explained their reasoning at length.

On Sept. 21, U.S. District Court Judge Robert W. Gettleman in Chicago dismissed a lawsuit filed by Sandy Point Dental seeking coverage for COVID-19 closure losses. In his opinion, Gettleman noted what a colleague in New York wrote when rejecting a similar claim by a magazine against an insurer. That opinion said the coronavirus “damages lungs. It doesn’t damage printing presses.”

“The coronavirus does not physically alter the appearance, shape, color, structure, or other material dimension of the property,” Gettleman wrote in his order. “Consequently, plaintiff has failed to plead a direct physical loss — a prerequisite for coverage.”

U.S. District Judge Cathy Ann Bencivengo in San Diego wrote an 11-page order on Sept. 11 granting a motion by Farmers Group Inc. to dismiss a lawsuit filed by Pappy’s Barber Shops. The judge gave Pappy’s an opportunity to show how an amended pleading might persuade her that coverage is owed, but also said “any amendment is likely to be futile.”

Bencivengo said no coverage is owed under Farmer’s policy unless government orders, at a minimum, prohibit access to the insured premises due to a direct physical loss of or damage to property elsewhere.

“The policy insures property, in this case plaintiffs’ property and physical places of business, and not plaintiff’s business itself,” Bencivengo explained. “To that end, the civil authority coverage provision only provides coverage to the extent that access to plaintiff’s physical premises is prohibited, and not if plaintiff’s are simply prohibited from operating their business.”

A database created by the Zelle law firm lists 17 COVID-19 cases that have been dismissed in 11 jurisdictions, and four where motions to dismiss were denied. A separate database maintained by the University of Pennsylvania Carey School of Law shows two additional cases where dismissal motions were denied.

Three of the dismissal motions were denied by the same judge: U.S. District Judge Stephen Bough for the Western District of Missouri in Kansas City. In Studio 417 Inc et al v Cincinnati Insurance Co., Bough said the plaintiffs plausibly alleged that coronavirus was a “physical substance” that attached to and damaged properties, rendering them unsafe and unusable. Bough later rejected two other insurer dismissal motions. He has not ruled on the merits of any of the cases.

A U.S. District Court Judge in Orlando, Fla; a state judge in Bergen County, N.J. and a state judge in Philadelphia have also denied motions to dismiss COVID-19 business-interruption claims, the databases show. Those cases remain pending.

Badger said the judges who denied motions to dismiss COVID-19 lawsuits did not determine that coverage is owed.

“It means only that accepting the pleaded facts in the lawsuit as true, the court believed there may be some argument to be made for coverage,” he said. “In these cases the insured must still survive a motion for summary judgment and then establish coverage at trial.”

Insurers still a long way to go. The University of Pennsylvania database shows 1,099 lawsuits seeking coverage for COVID-19 losses have been filed so far.

The pace of new filings has slowed. The litigation tracker shows 30 cases were filed in the week ending Sept. 14, compared to a weekly peak of 70 cases filed during the week ending May 4.

*This story ran previously in our sister publication Claims Journal.