Mashantucket Pequot Tribal Nation v. Factory Mutual Ins. Co., 224 Conn.App. 429

The Mashantucket Pequot Tribal Nation (“Tribe”) owns and operates Foxwoods Resort Casino and related properties.
The Tribe purchased an “all risk” insurance policy from Factory Mutual Insurance Co., covering physical loss/damage to property and business interruption, but subject to certain exclusions, including for virus contamination.
Due to the COVID-19 pandemic, the Tribe claimed over $76 million in losses, arguing that COVID-19 caused physical loss/damage and business interruption, and that the virus exclusion did not apply to communicable disease.
Factory Mutual denied coverage, citing the contamination (virus) exclusion.
The trial court granted Factory Mutual's motion to strike most claims, finding the contamination exclusion applied, but allowed limited claims for communicable disease response/business interruption up to a $1 million sublimit.
On appeal, the Tribe argued that it adequately alleged physical alteration of property and that the policy recognized communicable disease as physical loss or damage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does COVID-19 cause "physical loss or damage" under policy?	Presence of COVID-19 physically altered property; thus, coverage is triggered.	COVID-19 did not cause tangible, physical alteration; mere presence does not trigger coverage.	No physical/tangible alteration alleged; mere conclusory assertions insufficient; coverage not triggered.
Does the contamination (virus) exclusion bar coverage?	Exclusion does not apply to communicable diseases like COVID-19.	Exclusion expressly bars costs from viruses, including COVID-19.	Exclusion applies; clear policy language unambiguously bars coverage for losses due to virus, including COVID-19.
Does policy’s communicable disease coverage override exclusion?	Policy language equates communicable disease with physical loss/damage for coverage.	Communicable disease coverage is separate, limited, and does not equate to physical damage.	Communicable disease coverage is distinct, capped, does not abrogate virus exclusion for other policy sections.
Can the question of physical alteration be resolved on pleadings?	Sufficient allegations of alteration require fact-finding beyond pleadings.	No facts pleaded showing specific physical alteration; only conclusions stated.	Legal precedent allows resolving at pleading stage; plaintiff only pleaded conclusions, not facts of physical alteration.

Connecticut Dermatology Group, PC v. Twin City Fire Ins. Co., 346 Conn. 33 (Conn. 2023) (no coverage for COVID-19 business interruption without physical/tangible alteration)
Hartford Fire Ins. Co. v. Moda, LLC, 346 Conn. 64 (Conn. 2023) (COVID-19 contamination, even if proved, is not physical loss/damage under insurance policies)
Capstone Building Corp. v. American Motorists Ins. Co., 308 Conn. 760 (Conn. 2013) (defining "physical damage" as physical, tangible alteration to property)