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On Wednesday, June 1, 2022, Wisconsin joined a majority of jurisdictions in denying insurance coverage for COVID-19 losses under standard property insurance policies.  See Colectivo Coffee Roasters, Inc. v. Society Insurance, 22 WI 36, §1. Colectivo was a class action case brought by bar and restaurant owners with property coverage through Society Insurance (“Society”), whose businesses were shut down as a result of public health orders related to the COVID-19 pandemic.  The Plaintiffs sought coverage under property policies issued by Society, claiming that they suffered a “loss of” their property by the presence of Covid-19, and when government orders forced them to stop dine-in service.

The case was originally filed in Milwaukee County Circuit Court, where Judge Laura Gramling Perez denied a motion to dismiss filed by Society, holding that the presence of Covid 19 at the businesses, and the government orders prohibiting dine-in service, caused a “loss of” property under the policies.  Society filed an appeal of that non-final order, which the Court of Appeals accepted.  The Wisconsin Supreme Court then granted a petition to bypass the Court of Appeals.  The Wisconsin Supreme Court ultimately reversed the lower court, holding that the presence of Covid-19 at the businesses and the government closure orders did not qualify as a “loss of” covered property under the Society policies.  The Court concluded, “as the overwhelming majority of other courts that have addressed the same issue have concluded, the presence of COVID-19 does not constitute a physical loss of or damage to property because it does not ‘alter the appearance, shape, color, structure, or other material dimension of the property.’” Id. at ¶ 13, quoting Sandy Point Dental P.C. v. Cincinnati Insurance Company, 488 F. Supp. 3rd 690, 693-94 (N.D. Ill. 2020).