The U.S. Court of Appeals for the Tenth Circuit joined many other courts in concluding that a restaurant’s financial losses during the COVID-19 pandemic were not covered under its insurance policy because the presence of the virus on its property did not constitute “direct physical loss or damage.”

Sagome is a company that owns the L’Hostaria restaurant in Aspen, Colorado. According to the opinion, Sagome sued its insurer, The Cincinnati Insurance Co., over denial of coverage under a comprehensive insurance policy. That policy provided that Cincinnati would “pay” for a direct “loss” to Sagome’s covered property “caused by or resulting from any covered cause of loss.” The policy additionally provided coverage for lost business income if Sagome’s operations were suspended during a “period of restoration.”

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