In Consolidated Restaurant Operations v. Westport Insurance, the Court of Appeals recently clarified that insurance policies providing coverage for “direct physical loss or damage” to an insured’s premises do not apply to business interruption losses sustained as a result of the COVID-19 pandemic absent some actual, material alteration to those premises or a complete and persistent dispossession from the premises.

In a decision written by Judge Caitlin J. Halligan and joined by Judges Jenny Rivera, Michael Garcia, Madeline Singas, Anthony Cannataro and Shirley Troutman and Justice Francesca E. Connolly of the Appellate Division, Second Department (Chief Judge Rowan D. Wilson took no part in the decision), the court affirmed a decision of the Appellate Division, First Department and dismissed a breach of contract and declaratory judgment action brought by a restaurant company against its insurance carrier.