A state judge in Connecticut has refused to dismiss a COVID-19 business interruption suit stating that a hotel chain seeking coverage for a property in Louisiana had adequately alleged physical loss or damage. The case is New Castle Hotels LLC v. Zurich American Insurance Co.  

New Castle Hotels LLC filed suit against Zurich in Connecticut state court in March. The suit sought coverage for several hotels in Maine, South Carolina, New York, Georgia, Canada, and Louisiana. The court dismissed litigation for all but a hotel in Louisiana, citing the virus exclusion in the policies. Louisiana law prohibits the virus exclusion contained in the policy.

Zurich argued that there was "nothing 'physical' about the loss or damage flowing from the COVID-19 virus," according to the ruling. The court asked if this merely needs to be asserted in order to be true?