Writ Petition Denied, Effectively Confirming That Covid-19 May Cause Covered Physical Damage Under Some Insurance Policies

On November 4, 2025, the Supreme Court of Nevada denied a petition for a writ of mandamus filed by insurers seeking to challenge denial of their partial summary judgment motion on the issue of whether Covid-19 may cause “direct physical loss, damage or destruction” of property under an all-risk insurance policy that includes affirmative coverage for loss caused by infectious disease.

In denying the insurers’ motion, the district court held that explicit coverage for infectious disease evidences a material difference from policies that do not include such an explicit coverage. Under a narrower policy, the Supreme Court of Nevada held, along with myriad courts nationwide, that infectious diseases do not physically affect property in a way that meets what insurers contend to be the threshold to trigger coverage. See, e.g., Starr Surplus Lines Ins. Co. v. Eighth Jud. Dist. Ct. Unlike the insurance policy in Starr Surplus, the district court explained that policies like those sold to Bloomin’ Brands evidently afford coverage for infectious or contagious disease because, by endorsement, they extend that coverage to instances that do not require any “direct physical loss, damage or destruction” of property.

The Nevada Supreme Court rejected the insurers’ petition that challenged the district court’s decision finding, among other things, that “there does not appear to be a need to clarify an important issue of law relating to its earlier Starr Surplus decision.” That reasoning effectively confirms the distinction between policies with and without disease coverage. The ruling allows the coverage lawsuit, first filed in 2020, to finally proceed in the trial court.

Bloomin’ Brands is represented in this litigation by Hunton Andrews Kurth LLP insurance recovery partner Michael S. Levine and associates Andrew S. Koelz and S. Alice Weeks.