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Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
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June 12, 2025
Covid Does Not Cause Direct Physical Damage

My Last Comment on Direct Physical Loss Requirement Again

Read the full article at https://lnkd.in/gtw9Z4hH, see the full video at https://lnkd.in/gmJz_zfs and at https://lnkd.in/gjxwPfY3 and https://zalma.com/blog plus more than 5050 posts.

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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00:08:38
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1 hour ago
Crime Doesn’t Pay – Allstate to Have Judgment Against Fraudsters

Fraud Perpetrators Will Have Judgment Entered in Favor of Insurer They Defrauded
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See the full video at https://lnkd.in/gGP7BYSU and at https://lnkd.in/gi4GEGeG, and at https://zalma.com/blog plus more than 5150 posts.

Allstate Effectively Proactive Against Insurance Fraud

Plaintiffs Allstate Insurance Company and other Allstate companies (collectively, “Plaintiffs”) sued seeking redress for losses incurred due to an alleged insurance fraud scheme. Plaintiffs alleged that Defendants Toshner, Lacey Davies, Michael Trinh, Roadside Response, LLC, and Responsible Billing, LLC’s (collectively, “Defendants”) submitted false reimbursement claims for hazardous material cleanups that were never actually performed, were unnecessary, or did not involve an Allstate insured.

In Allstate Insurance Company, et al. v. Daniel Toshner, et al., No. 1:24-CV-27-RP, United States District Court, W.D. Texas, Austin Division (July 9, 2025) Allstate moved for default to be entered against the defendants.

...

00:06:02
1 hour ago
Plaintiff Must be an Insured to Sue Insurance Company

When Plaintiff Gives Up Court Must Grant Summary Judgment

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It is Contumacious to Sue an Insurer if You are Not Insured

See the full video at https://lnkd.in/ggmMWkcN and at https://lnkd.in/gJXMDYxG, and at https://zalma.com/blog plus more than 5100 posts.

Defendant American National filed a motion for summary judgment because Plaintiff is not a named or third-party beneficiary of the Policy. Defendant contends that because Plaintiff is not covered by the Policy, Plaintiff cannot prove that Defendant breached the Policy or demonstrated bad faith under La. R.S. 22:1973 and 22:1892. In support of this contention, Defendant argued that the Policy only covers the “Named Insured/Mortgagee” of the property, Magee Holdings, LLC, and that the Policy does not name Plaintiff as an insured or a third-party beneficiary.

In Hannah Guillotte v. American National Property And Casualty Company, Civil Action No. 23-00931-BAJ-RLB, United States District Court, M.D. Louisiana (July 16, 2025) Plaintiff, the ...

00:06:32
July 25, 2025
Plaintiff Must be an Insured to Sue Insurance Company

When Plaintiff Gives Up Court Must Grant Summary Judgment

Post 5154

It is Contumacious to Sue an Insurer if You are Not Insured

See the full video at https://lnkd.in/ggmMWkcN and at https://lnkd.in/gJXMDYxG, and at https://zalma.com/blog plus more than 5100 posts.

Defendant American National filed a motion for summary judgment because Plaintiff is not a named or third-party beneficiary of the Policy. Defendant contends that because Plaintiff is not covered by the Policy, Plaintiff cannot prove that Defendant breached the Policy or demonstrated bad faith under La. R.S. 22:1973 and 22:1892. In support of this contention, Defendant argued that the Policy only covers the “Named Insured/Mortgagee” of the property, Magee Holdings, LLC, and that the Policy does not name Plaintiff as an insured or a third-party beneficiary.

In Hannah Guillotte v. American National Property And Casualty Company, Civil Action No. 23-00931-BAJ-RLB, United States District Court, M.D. Louisiana (July 16, 2025) Plaintiff, the ...

00:06:32
July 16, 2025
There is no Tort of Negligent Claims handling in Alaska

Rulings on Motions Reduced the Issues to be Presented at Trial

Read the full article at https://lnkd.in/gwJKZnCP and at https://zalma/blog plus more than 5100 posts.

CASE OVERVIEW

In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.

FACTS

Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.

Prior to trial Bernier had three remaining claims against State Farm:

1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.

Both Bernier and State Farm dispositive motions before ...

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May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

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See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

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