The Ninth Circuit upheld the dismissal of a California event operator’s lawsuit against its insurer over COVID-19 coverage. The dismissal followed a May ruling by the California Supreme Court, which found that COVID-19 does not cause the type of property damage required for insurance coverage to be triggered. As a result, the Ninth Circuit agreed that the event operator, Another Planet Entertainment, failed to demonstrate that a “direct physical loss or damage” occurred as required to support a claim for loss of business income.

Another Planet sued Vigilant Insurance Co. in October 2020, alleging a breach of contract after the insurer denied loss of business coverage attributed to Covid. A federal judge ruled against Another Planet in early 2021, stating that without evidence of property damage, there was no basis for coverage. Although some state court rulings had conflicted on this issue, the California Supreme Court’s clear decision against Another Planet’s claim led the Ninth Circuit to affirm the lower court’s decision and reject the operator’s appeal.

This case reflects the broader challenge businesses face in securing COVID-19 loss coverage, with many similar lawsuits being dismissed nationwide.