COVID-19 Causing Property Damage

COVID-19 Causing Property Damage

COVID-19 Causing Property Damage?

By Amelia H. Beard and Bruce D. Partington

The COVID-19 pandemic has prompted a multitude of responses by federal, state, and local civil authorities. These civil authority actions include social distancing and stay-at-home orders; closure of bars[1], restaurants[2], gyms[3], and even medical/dental service providers to the extent their services are non-emergency, to name a few. The loss in business revenue from mandated closures may be covered by a commercial property insurance policy.

First, let us take a look at a recent civil authority action right here in our own backyard, and no, it’s not about the beaches. On April 7, 2020, the Walton County Board of County Commission , with some encouragement from the Walton County Chamber of Commerce, extended the local state of emergency to April 14, 2020.  This latest resolution responding to the COVID-19 pandemic includes a provision that may prove to be significant to local businesses.  Resolutions 2020-25 and 2020-29 make no mention of property damage being caused by coronavirus, but the April 7th resolution states:

WHEREAS, conditions exist requiring the extension of the initial declaration of a state of local emergency because of the propensity of the novel coronavirus to spread person to person and also because the novel coronavirus physically is causing property damage due to its proclivity to attach to surfaces for prolonged periods of time;

The Walton County Commission’s action represents a trend taking hold throughout the U.S. and Florida. The move may help to solidify a claim for business interruption losses under property insurance policies that require “property damage” before business interruption coverage is available. It certainly shows a commitment by the Commission to lend a hand to local businesses. Hopefully, other local governments and county commissions will take similar actions.

Some business owners have already filed claims and been rejected. That might just be the beginning for your claim though. Proper analysis of policy coverage and correct submittal of a claim is key. Policy wording is critical, and most polices require some nexus to a direct physical loss or damage to the covered property in order to trigger coverage. Is the presence or fear of presence of COVID-19 in your place of business a “direct physical loss or damage”? That is the central issue in these claims, and hopefully governmental acknowledgment of property losses will be helpful in this determination.  Some jurisdictions have allowed for an odor, vapor, or mold to be considered physical damage, so possibly that line of reasoning may be extended to COVID-19.

Some policies may contain a civil authority clause. These clauses provide coverage for business losses caused by government action that denies access to the insured property. The critical fact in this analysis is typically whether or not you are denied access to the insured property and if that denial of access is related to nearby physical loss or damage.

Many questions remain. Will other neighboring counties and municipalities make the same insightful move as the Walton County Commissioners? Will governmental authorities take action to prohibit access to certain businesses? We can expect to see many of the above-discussed claims in litigation in the coming months and years. How those arguments are resolved will vary by jurisdiction but most certainly require the expertise of a commercial litigator undeterred by an insurance carrier’s denial.  If you have questions related to this article, please contact Clark Partington.

[1] Florida Executive Order 20-68: “any licensee authorized to sell alcoholic beverages for consumption on premises that derive more than 50 percent of its gross revenue from the sale of alcoholic beverages shall suspend all sale of alcoholic beverages for thirty days from the date of this order, effective at 5 p.m. today, March 17, 2020.”

[2] See Florida Executive Order 20-71, which ordered all restaurants and food establishments to suspend on-premises food and alcohol consumption for customers. Those establishments may, however, operate their kitchens for providing delivery or take-out services

[3] Florida Executive Order 20-71 required the closure of all gymnasiums and fitness centers.

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Amelia H. Beard is an attorney in Clark Partington’s Santa Rosa Beach (Grayton) office. Her practice areas include civil litigation, real estate transactions, business formation, estate planning, and personal injury. Amelia can be reached at or (850) 269-8860.

Bruce D. Partington is a Shareholder and member of the firm’s general litigation department. Board Certified in Construction Law since 2005, Bruce’s practice is largely devoted to this area as well as other commercial, real property, and insurance litigation. Bruce can be reached at (850) 432-1399 or

About Clark Partington:

Clark Partington is the largest business focused firm in the Florida panhandle with offices in Pensacola, Destin, Grayton Beach & Tallahassee.  The firm also maintains a presence in South Alabama with an Orange Beach office.  Since 1976 Clark Partington has grown to over forty lawyers and has served the people and businesses of Florida through an innovative and collaborative approach to practicing law.  Our lawyers are consistently recognized for their service to the profession and excellence in the courtroom.  More information about the firm’s practice, its attorneys, and recognitions may be found at

This publication should not be construed as legal advice.  Its applicability is dependent upon specific facts and circumstances and is provided for informational purposes only.  You should not act upon this information without seeking advice from a lawyer licensed in your own state.