Best Center Fairfield v. Steadfast Insurance Company

On March 10, 2025, Best Center Fairfield, a multi-tenant commercial property in Connecticut, sued Steadfast Insurance Company seeking coverage for substantial business income losses suffered during COVID-19 pandemic shutdowns. The plaintiff argued that government closure orders and the presence of the virus caused direct physical loss or damage to its property, triggering business interruption and civil authority coverage under its all-risk property policy. Steadfast denied the claim, maintaining that economic loss alone, without tangible physical alteration, does not satisfy the policy requirement. The case joined a nationwide wave of similar disputes testing the boundaries of commercial property insurance in the aftermath of the pandemic.

The court granted Steadfast Insurance Company’s motion to dismiss, ruling that the policy’s business interruption coverage unambiguously requires tangible, physical alteration of property, and that economic losses from virus-related shutdowns do not meet that threshold. The decision aligned with the majority of post-pandemic rulings across the United States.

Whether the actual or potential presence of the COVID-19 virus on insured property constitutes “direct physical loss or damage” sufficient to trigger business interruption and civil authority coverage under a standard commercial property insurance policy.

The ruling reinforced a strong national consensus that standard business interruption policies do not cover COVID-19 losses, providing clarity and stability for the insurance industry while leaving many commercial property owners without recourse for pandemic-driven revenue losses, thus intensifying calls for specialized pandemic risk insurance solutions.