The Washington Supreme Court has ruled in insurers' favor in COVID-19 business interruption litigation, becoming the fifth state supreme court to do so. Alternately, a California appellate court recently overturned a lower court ruling and held that a nail salon was entitled to business interruption coverage under its policy. The cases are Hill & Stout, PLLC v. Mut. of Enumclaw Ins. Co., No. 100211-4, 2022 Wash. LEXIS 434 (Aug. 25, 2022), and Butter Nails & Waxing v. Underwriters at Lloyd's, Bo. B311455, 2022 Cal. App. Unpub. LEXIS 5264 at *1 (Aug. 25, 2022), respectively.

The Butter Nails case in front of the Los Angeles-based state appeals court focused on the salon's property policy and cited a provision that insured against business interruption due to "Civil Authority Action" requiring evacuation of the insured property.

According to the ruling, it is already "widely established that temporary loss of use of property due to pandemic-related closure orders without more does not constitute physical loss or damage." Most cases revolving around this issue involve insured seeking coverage under policy provisions requiring property loss or damage, but in this case the "plaintiff does not seek coverage under any portion of the policy that requires any type of property loss or damage." Instead, the plaintiff here seeks coverage under a Civil Authority Endorsement which says it will pay for losses caused by business interruption because of "Civil Authority Action" requiring evacuation.