Hawaii Supreme Court to Address Influential COVID-19 Insurance Appeal
Hawaii Supreme Court hears Tiki’s Grill & Bar’s insurance appeal on October 9.
Why it matters: Businesses across sectors could see changes in insurance coverage strategies, affecting policy applications during pandemics.
- Hawaii Supreme Court to review on October 9, 2023.
- The case questions 'direct physical loss' definition.
- DTRIC Insurance argues closures due to government orders, not damage.
- DTRIC exits Hawaii, impacting policy renewals.
The Hawaii Supreme Court will review an appeal by Tiki’s Grill & Bar on October 9, potentially redefining how 'direct physical loss' is interpreted in insurance claims involving COVID-19. The outcome could influence policy language and business strategies for addressing similar disruptions in the future.
Traditionally, 'direct physical loss' in insurance requires tangible, identifiable damage. However, a 2025 ruling challenged this notion, suggesting loss of access might qualify if physical barriers prevent property use.
DTRIC Insurance Company's position: The company maintains that business interruptions stem from pandemic-related government orders, not direct damage, frequently citing virus exclusion clauses. But the court emphasized that these exclusions may not apply if access to the property itself was denied, not merely because of the virus presence.
The impact of this case is significant amid DTRIC's withdrawal from Hawaii's market. The insurer's exit affects policy renewal options for many businesses that relied on its coverage, altering the insurance landscape considerably.
By the numbers:
- October 9, 2023 — Date of Supreme Court review
- 2025 — Year of the ruling that questioned 'direct physical loss' interpretation
Yes, but: While the case could redefine coverage interpretations, insurers might tighten definitions to mitigate future claims.