Mudpie, Inc. v. Travelers Casualty Insurance Company of America, — F.4th —-, 2021 WL 4486509 (9th Cir. Oct. 1, 2021), Case No. 20-16858.
In March 2020, California state and local authorities issued orders limiting operations of businesses in response to the COVID-19 pandemic. Mudpie, Inc., a children’s retailer, alleged that it was not able to operate after March 16, 2020, due to these orders.
Mudpie then filed a claim with Travelers, its commercial property insurer, seeking business income and extra expense coverage. Travelers denied coverage because the limitations on Mudpie’s operations were the result of government orders, not “direct physical loss of or damage to” property, as required by the policy.