Rock Dental Arkansas PLLC v. Cincinnati Insurance Company, 40 F.4th 868

Rock Dental Arkansas PLLC and Rock Dental Missouri LLC operated dental clinics and sued Cincinnati Insurance after the insurer denied pandemic-related loss claims.
Policy provisions at issue: Business Income coverage (covers actual loss of business income due to "suspension" of operations caused by direct "loss" to property from a Covered Cause of Loss) and Civil Authority coverage (covers business income loss when civil authority prohibits access due to damage to other property).
The policy defines "Loss" as "accidental physical loss or accidental physical damage," and "Covered Causes of Loss" as direct loss unless excluded.
Rock Dental alleged COVID-19 presence physically damaged or deprived use of its properties, forcing suspension of operations under government orders.
The district court dismissed under Rule 12(b)(6) for failure to state a claim; the Eighth Circuit reviewed the dismissal and contract interpretation de novo and affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Business Income coverage applies absent physical alteration	COVID-19 presence or inference of presence caused direct physical loss or damage to property, so coverage applies	Policy requires accidental physical loss or damage; loss of use without physical alteration not covered	Denied — policy requires physicality; allegations were conclusory and insufficient
Whether allegations that virus was present plausibly plead physical loss	Presence/inference of virus at premises suffices to show physical contamination/damage	Complaint contains threadbare recitals and conclusory assertions without factual detail of physical alteration or need for decontamination	Denied — allegations were conclusory; no plausible factual showing of physical alteration or contamination
Whether Civil Authority coverage is triggered by government orders	Government-mandated closures caused by COVID-19 should trigger civil authority coverage	Coverage requires damage to other property and prohibition of access to area surrounding that damaged property; no such other-property damage alleged	Denied — no allegations of physical damage to other property required by the provision

Oral Surgeons, P.C. v. Cincinnati Ins. Co., 2 F.4th 1141 (8th Cir.) (policy requires some physicality to constitute "physical loss or damage")
Planet Sub Holdings, Inc. v. State Auto Prop. & Cas. Ins. Co., 36 F.4th 772 (8th Cir.) (complaint must plausibly allege physical loss or damage from virus)
Brown Jug, Inc. v. Cincinnati Ins. Co., 27 F.4th 398 (6th Cir.) (conclusory allegations of virus presence insufficient)
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585 (8th Cir.) (Rule 12(b)(6) plausibility standard)
Ashcroft v. Iqbal, 556 U.S. 662 (Supreme Court) (pleading must contain factual allegations, not conclusory recitals)
Phila. Indem. Ins. Co. v. Austin, 383 S.W.3d 815 (Ark.) (under Arkansas law, policy language is construed according to plain meaning)
Pentair, Inc. v. American Guaranty & Liability Ins. Co., 400 F.3d 613 (8th Cir.) (policy does not cover mere loss of use absent physical damage)
Sandy Point Dental, P.C. v. Cincinnati Ins. Co., 20 F.4th 327 (7th Cir.) (loss of intended use alone is insufficient for physical loss or damage)