ROCKLAND FUNDING v. ACE AMERICAN INSURANCE COMPANY (2025)

We affirm the final judgment which denied an insurance claim for damages, determining based on New York law that the presence of the COVID-19 virus on appellant's property did not constitute direct physical loss or damage so as to trigger coverage under the insurance policy with appellee. See Consol. Rest. Operations, Inc. v. Westport Ins. Corp., 41 N.Y.3d 415, 211 N.Y.S.3d 800, 235 N.E. 3d 332, 342 (2024) (holding that the term “physical damage” within an insurance policy “must be understood to require a material physical alteration to the property—one that is perceptible, even if not visible to the naked eye,” and the presence of COVID on the properties did not constitute “physical damage;” further holding that “ ‘[d]irect physical loss’ thus requires more than loss of use; it requires an actual, complete dispossession”). In addition, the policy also contained an exclusion for damage caused by contaminants, which specifically included damage caused by a virus. See Northwell Health, Inc. v. Lexington Ins. Co., 550 F. Supp. 3d 108, 121 (S.D.N.Y. 2021).

Affirmed.

Per Curiam.

Klingensmith, C.J., Warner and Forst, JJ., concur.