5th Circuit Affirms No Coverage for Lost Business Income for COVID Lock-Down

A New Orleans clothier shut down its business in response to COVID lock-downs. Both the State of Louisiana and the City of New Orleans issued lockdown orders in 2020 for non-essential businesses in response to COVID. The business submitted claims to its carrier for the lost business income, under two sections of the policy: one covering “direct physical loss of or damage to property” and the other covering the loss of business income when access to the store is prohibited by a civil authority order “as a direct result of” a covered loss of property. The carrier denied coverage, and the trial court granted judgment on the pleadings to the carrier. On appeal, the 5th Circuit affirms that the policy did not provide coverage. In Q Clothier New Orleans, L.L.C. v. Twin City Fire Insurance Company No. 21-30278, the court reviewed the specific language under the coverage sections argued by the business and found that the policy language required tangible property damage, and did not extend to loss of income.