Neuro-Communication Servs. v. Cincinnati Ins. Co., 2022 Ohio 4379

In March 2020 Ohio issued emergency and public‑health Shutdown Orders (notably March 17 and March 22) that required nonessential businesses to cease in‑person activities.
Neuro‑Communication Services (an audiology practice) closed almost all operations March 23–May 4, 2020 and submitted a business‑income claim to its all‑risk commercial property insurer, Cincinnati Insurance.
The policy covered loss for a “direct ‘loss’ ” defined as “accidental physical loss or accidental physical damage,” and its Business Income Extension required a suspension caused by direct loss to Covered Property.
Cincinnati denied coverage, saying Neuro’s losses were a nonphysical loss of use, not physical loss or damage to Covered Property.
The federal district court certified the question whether (1) community presence of SARS‑CoV‑2, (2) presence of the virus on surfaces at a premises, or (3) presence of an infected person on premises, constitutes “direct physical loss or damage to property.”
The Ohio Supreme Court answered: no — the policy’s “direct ‘loss’ ” requires physical loss or damage; mere loss of use, community presence, surface presence, or presence of an infected person do not qualify.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of “direct ‘loss’ / physical loss”	“Physical loss” includes deprivation or loss of use of premises (no tangible alteration required).	Requires an actual, tangible physical alteration or damage to Covered Property.	“Direct ‘loss’ ” means physical loss or damage; loss of use alone is not covered.
General presence of COVID‑19 in community	Community prevalence of virus caused the shutdown and thus physical loss.	Community presence effects do not alter property physically.	General community presence does not constitute physical loss.
Presence of virus on surfaces at a premises	Virus on surfaces is contamination that physically impairs property and use.	Mere transient presence/contamination does not physically alter property’s structure.	Presence of virus on surfaces does not, by itself, constitute physical loss or damage.
Presence of an infected person on premises	An infected person on-site makes premises effectively contaminated and unusable.	A person’s presence does not physically change covered property.	Presence of an infected person does not constitute physical loss or damage.

Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (Ohio 2003) (governing principles of contract interpretation; enforce parties’ intent)
Cincinnati Ins. Co. v. CPS Holdings, Inc., 115 Ohio St.3d 306 (Ohio 2007) (insurance contract must be read as a whole)
Santo’s Italian Café, L.L.C. v. Acuity Ins. Co., 15 F.4th 398 (6th Cir. 2021) (loss of use is not the same as physical loss)
Mastellone v. Lightning Rod Mut. Ins. Co., 175 Ohio App.3d 23 (Ohio Ct. App. 2008) (temporary surface contamination does not necessarily constitute direct physical loss)
TRAVCO Ins. Co. v. Ward, 715 F. Supp.2d 699 (E.D. Va. 2010) (toxic drywall rendered property uninhabitable; contrasting hazardous conditions may constitute physical loss)
Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399 (1st Cir. 2009) (chemical odors caused physical injury to tangible property requiring replacement)
Verveine Corp. v. Strathmore Ins. Co., 184 N.E.3d 1266 (Mass. 2022) (the mere presence of the virus does not amount to loss or damage to property)