This Californian Appeal Court judgment previously discussed here (Part 1, Part 2 and Part 3)) was also required to consider the insured’s argument that the Civil Authority Coverage Clause applies because the government orders were made in direct response to the continued and increasing presence of the Coronavirus, a dangerous physical condition, on and around its property.

And that the Civil Authority cover applies because the closure orders were the actions of civil authorities that prohibit access to the insured premises due to direct physical loss of or damage to other property caused by or arising from the Coronavirus.

The court said that it was not necessary to resolve any dispute as to whether the orders prohibit access to the insured premises.  The civil authority coverage does not apply because the plain language of the orders shows that they were not based on “direct physical loss of or damage to property” to other premises.

The orders were very clear about the reason they were issued.  It was to ensure that the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue, to slow the spread of Covid-19 to the maximum extent possible.

It was clear that the orders were made in an attempt to prevent the spread of the virus. The orders gave no indication they were issued “due to physical loss of or damage to ‘any property”.  In the circumstances the orders did not give rise to civil authority coverage.

The position would be no different in South African law.

(The Inns By The Sea v California Mutual Insurance Company (Super. Ct. No. 20CV001274)