Litigation has already started and courts in Texas, Michigan, New York and Washington, D.C. have already ruled in favor of the insurance industry in four decisions. In stark contrast, only one Missouri court refused to dismiss a similar suit on procedural ground as opposed to the merits.

For example,in Diesel Barbershop, a Texas court granted State Farm’s motion to dismiss since there was no “distinct, demonstrable physical alteration of the property.” The court rejected the policyholder’s argument that the loss of the ability to use the insured’s barbershops due to COVID-19 shutdown orders was sufficient to trigger coverage since there was no direct physical loss. The judge further held that even if there was a direct physical loss, the insured’s claims would be barred by the virus exclusion. The court rejected the insured’s argument that the exclusion did not apply since their losses were caused by the government shutdown orders and not COVID-19. The court held that since the virus exclusion included anti-concurrent causation language, that the exclusion applied since COVID-19 also was a cause of the insured’s loss. The court wrote that “while the orders technically forced the properties to close to protect public health, the orders only came about sequentially as a result of the COVID-19 virus spreading rapidly throughout the community.” Significantly, Florida courts also enforce anti-concurrent cause language in insurance policies.