My Last Comment on Direct Physical Loss Requirement Again
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Post 5096
In Tulalip Tribes of Washington v. Lexington Insurance Co., Wn.App. 2d, 566 P.3d 149 (2025), the Washington Court of Appeals held that COVID-19 does not trigger coverage under an “All Risk” policy that predicates coverage on “direct physical loss or damage” to property. Because the trial court’s ruling in this matter is contrary to Tulalip, the Court of Appeals reversed and remanded to the trial court ordering dismissal.
In The Board Of Regents Of The University Of Washington v. Employers Insurance Company Of Wausau, A Liberty Mutual Company, No. 86493-9-I, Court of Appeals of Washington, Division 1 (June 9, 2025) the question of direct physical loss claims as a result of the Covid Pandemic got resolved again.
THE POLICIES
The University of Washington (UW) obtained from Employers Insurance Company of Wausau (Wausau) “All Risk” insurance coverage for several of its properties. UW sought coverage after government orders relating to COVID-19 required temporary closures of those properties. The relevant policy provisions predicate coverage on “direct physical loss or damage.”
THE SUIT
Wausau denied coverage based on those policy provisions, UW filed a complaint asserting claims for breach of contract, declaratory judgment, bad faith, and violations of the Washington Consumer Protection Act and Washington Insurance Fair Conduct Act. Wausau filed a motion to dismiss the claims based on the policy provisions, and the trial court denied that motion.
ANALYSIS
Construction of an insurance policy is always a question of law. The Court of Appeals examined the policy to determine whether under the plain meaning of the contract there is coverage. If the policy’s language is clear and unambiguous, the court must enforce the policy as written. Also, relevant here, the insured bears the burden of showing that coverage exists.
Thus, the issue is whether UW has alleged the required “direct physical loss or damage” to trigger coverage under the relevant policies for the COVID-19-related losses at issue.
The Court of Appeals rejected the arguments raised by UW for a similar loss of functionality argument in Tulalip because, the insureds in Tulalip maintained possession of the property, the property was still functional and able to be used, and the insureds were not prevented from entering the property.
The Court of Appeals concluded that the insureds’ deprivation was more akin to an abstract or intangible loss. An intangible loss is insufficient to establish direct physical loss or damage. The deprivation must still be caused by a physical impact to the property. The same reasoning and holding apply equally here because, as in Tulalip, UW’s allegations show it suffered an abstract or intangible loss as opposed to a physical loss.
The policies define a “covered loss” as “[a] loss to covered property caused by direct physical loss or damage insured by this Policy.” Thus, as in Tulalip, there must be direct physical loss or damage to property for UW to obtain coverage under the communicable disease coverage endorsements. Because UW has failed to allege such loss or damage the communicable disease coverage endorsements do not apply.
CONCLUSION
In sum, the Court of Appeals reject UW’s arguments regarding its entitlement to coverage under the policies at issue for the same reasons set forth in Tulalip. UW’s breach of contract and declaratory judgment claims fail on this basis. Because Tulalip is directly on point and fatal to UW’s coverage arguments, the Court of Appeals reversed and remanded the case to the trial court for for dismissal.
ZALMA OPINION
About two years ago I proposed to never again write about Covid claims and the need to prove direct physical loss. For reasons I don’t understand parties continue to bring to court cases claiming direct physical loss that is really abstract and intangible losses. Just alleging direct physical loss where none exist wastes the time of the parties, the lawyers, the courts and the courts of appeal. Washington affirmed its precedent that should tell the people of the US to stop trying to make insurers provide a coverage it did not agree to provide.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
In United States Of America v. Thomas Addaquay, United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
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Post 5489
Posted on September 14, 2026 by Barry Zalma
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Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
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To Prove Defamation the Statement Must be Of and Concerning the Plaintiffs
Post 4867
In Michael Moloney and Sergio Cantu v. United Services Automobile Association, No. 04-25-00519-CV, Court of Appeals of Texas, Fourth District, San Antonio (October 14, 2026) Michael Moloney and Sergio Cantu appealed from the trial court’s granting of a traditional motion for summary judgment in favor of United Services Automobile Association (“USAA”) on their defamation claim.
BACKGROUND
Moloney and Cantu sued USAA for defamation, alleging that they are the principals of Informed Roofing & Restoration, LLC (“Informed Roofing”), which is primarily engaged in the residential roofing repair and replacement business, and that an employee or agent of USAA had made false and defamatory statements to the San Antonio Police Department (“SAPD”) concerning them.
Specifically, Moloney and Cantu alleged that an employee of ...
ZIFL – Volume 30, Issue 20 Subscribe to ZIFL here https://lnkd.in/gfpn78FM
Posted on October 15, 2026 by Barry Zalma
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud.
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It is provided FREE to anyone who visits the site at https://lnkd.in/gVT5G9s
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Post 4863
Posted on October 14, 2026 by Barry Zalma
In United States Of America v. Anthony Curtis Brewer, No. 26-10745, United States Court of Appeals, Eleventh Circuit (October 8, 2026) Anthony Curtis Brewer became the fiduciary for an incapacitated recipient of Department of Veterans Affairs survivor benefits and agreed to use her funds solely for her care and support without commingling them with his own.
The VA determined that he misused $67,232.33 and removed him as fiduciary in 2022. Brewer pleaded guilty to theft of more than $1,000 in government property under 18 U.S.C. § 641. At sentencing, the district court attributed $53,567 in loss to him, producing an advisory Guidelines range of 15 to 21 months.
Citing the victim’s vulnerability, Brewer’s attempts to avoid responsibility, and his other fraudulent conduct — including state convictions for arson and insurance fraud — the court ...
