In Star Surplus Lines Insurance Co. v. 8th Judicial District Court in and for County of Clark, 535 P.3d 254 (2023), the insured argued that the presence of Covid-19 constituted “direct physical loss or damage” triggering coverage. The claimant pointed to what it asserted was undisputed scientific evidence showing that the Covid-19 virus was a physical particle that could “land on and attach to property and then last for days.” There had been other anecdotal evidence submitted. The trial court found fact questions regarding whether the Covid-19 virus physically altered property. The insured’s company filed a writ and petitioned the Nevada Supreme Court on the issue. The Nevada Supreme Court accepted the petition.
The insurer argued that direct physical loss or damage required some distinct demonstrable physical alteration to the property or some sort of structural or physical change to the property which altered the property’s functionality or use. The evidence provided by the insured did not raise triable issues of fact regarding the existence of “direct physical loss or damage” under the policy’s insuring agreement. Alternatively, the policy’s pollution and contamination exclusions would have precluded coverage anyway. Because of this, the insurance company was entitled to mandate misrelief, vacating the trial court’s denial of the insurer’s summary judgment motion.