Alaska Supreme Court Justice Jude Pate, right, asks a question during oral arguments in a case concerning correspondence education allotments, on June 27, 2024, in the Boney Courthouse in Anchorage. that the COVID-19 pandemic does not qualify as “physical loss” or “damage” under common commercial insurance policies.
The court’s decision, rendered unanimously, has major financial implications: If the court had decided differently, the ruling could have allowed businesses to collect millions of dollars from their insurance policies to cover the costs of COVID-mandated closures and health restrictions., the American Property Casualty Insurance Association said insurance premiums would rise as a result if insurers were required to pay out more.
Baxter challenged the denial in state court, and the insurer moved the case to federal court, which then asked the Alaska Supreme Court to decide whether the presence of COVID-19 constitutes “direct physical loss” or “damage” to property, and whether governmental orders pertaining to“Our answer to both questions is ‘no,’” Carney wrote in Friday’s published order.