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Insurance Coverage: Defining Physical Loss or Damage; Testing Assumptions About What Triggers Coverage

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, February 1, 2022

Recorded event now available

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This CLE webinar will discuss whether "physical loss or damage" sufficient to trigger prima facie coverage under a property or business income policy requires the policyholder to present evidence of "distinct, demonstrable, physical alteration of the property." The panel of both policyholder and insurer counsel will review the origins of the physical alteration requirement and then consider the merits of recent scholarship arguing that the physical alteration requirement is a fallacy perpetuated by errors in a well known insurance law treatise that courts accept without adequate analysis.


Business income coverage, indeed most property insurance coverage, is ordinarily triggered by "physical loss or damage," so the meaning of this phrase is of utmost importance to both insurers and policyholders. Insurers often argue that physical loss or damage cannot exist without--or only exists in the presence of--distinct, verifiable, and physical alteration of the property.

Cases requiring physical alteration frequently cite 10A Steven Plitt et al., Couch on Insurance 3d Sec. 148:46, for the proposition that a physical alteration requirement is the "law" or the "majority" position. Policyholder counsel, however, argue that the treatise ignores a significant body of contrary law.

Policyholders point to what they contend is an equal, opposite, and precedential body of authority that no physical alteration is now or has ever been required to trigger a prima facie case coverage. Recent scholarship suggests that courts have relied too heavily on and too quickly on Couch's purported error and have failed to critically analyze the legal question.

Listen as this experienced panel discusses the law of direct physical loss and how to think critically about the issue.



  1. Historical overview of property insurance
  2. General framework of business interruption insurance coverage
  3. Arguments and cases regarding virus as property damage
  4. Arguments and cases regarding coverage for closure by civil authority
  5. Recommendations for insureds and insurers going forward


The panel will review these and other pivotal questions:

  • What is the physical alteration of property?
  • How do other insurance treatises define direct physical loss?
  • From whose perspective is loss defined?


Masters, Lorelie
Lorelie S. Masters

Hunton Andrews Kurth

Ms. Masters handles all aspects of complex, commercial litigation and arbitration. She has advised clients on a wide...  |  Read More

Raskin, Jeffrey
Jeffrey S. Raskin

Morgan Lewis & Bockius

Mr. Raskin is head of the firm’s Insurance Recovery Practice in the San Francisco office. He has...  |  Read More

Stern, Max
Max H. Stern

Duane Morris

Mr. Stern is the head of the firm’s Insurance Litigation Division.  As a trial and appellate lawyer, he has...  |  Read More

Stern, Eric
Eric B. Stern

Kaufman Dolowich Voluck

Mr. Stern concentrates his practice in all aspects of insurance coverage litigation. He has analyzed, written on and...  |  Read More

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