A New Hampshire Superior Court granted a hotel chain summary judgment on its suit for coverage due to losses caused by COVID-19. Schleicher & Stebbins Hotels, LLC v. Starr Surplus Lines Ins. Cos., No. 217-2020-00309 (N.H. Super. Ct. June 15, 2021).      Government orders were issued restricting the operation of the hotels in March 2020. In April 2020, the hotels were deems as "lodging providers," meaning they had to restrict lodging to vulnerable populations and essential workers only. When the hotels were allowed to reopen they continued to face a number of restrictions. They could accept overnight reservations from in-state residents but not provide lodging to out-of-state visitors unless the visitors completed a fourteen-day quarantine.     The policies required "direct physical loss of or damage to property" in order to recover business loss. Coverage was denied by the insurers because the properties were not physically damaged. The loss of revenue and closures were due to the governmental orders to slow the spread of the virus.      Cross-motions for summary judgment were filed. The hotels sought a declaratory ruling that "Any requirement under the policies of "direct physical loss or damage to property" was met where property is impacted by the coronavirus." The court rejected the insurers argument that "distinct and demonstrable" changes to property must be demonstrated and be capable of remediation, or result in dispossession. The court concluded that the term "direct physical loss of or damage to property" encompassed the kind of damage caused by the spread of SARS-CoV-2 to the hotels' property. The hotels' motion for summary judgment while the motions by all but one of the insurers was denied.      One of the hotels' insurers, Axis, survived the insured's summary judgment motion because its contamination exclusion barred coverage. The court agreed that SARS-CoV-2 was a "virus" that was 'dispersed" by persons with COVID-19. The other insurers' reliance on their Microorganism Exclusion was rejected. Competing views from other courts on whether a virus, such as SARS-CoV-2 was a "microorganism." The exclusion had to be construed narrowly and against the insurer. Therefore, the competing views meant that "a virus is not unambiguously understood to be a 'microorganism.'"

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