All-risk policies insure fortuitous losses that are not excluded by the policy. The use of the phrase “all-risk,” however, is somewhat of a misnomer because the policy itself contains numerous specific exclusions. In that regard, “all risks” does not mean “every risk.”
A question arises as to what direct physical loss means against the backdrop of such a broad-based coverage. The modern interpretive trend is liberalizing the meaning of direct physical loss to focus upon loss of use as opposed to direct physical loss involving physical alteration.Fire, water, smoke and impact from another object are typical examples of physical damage from an outside source that may demonstrably alter the components of a building and trigger coverage. However, proof of physical damage to a building as an entity by sources unnoticeable to the naked eye may need to meet a higher threshold.
Restaurants and bars with all-risk commercial insurance that includes business interruption could be insured for loss of income due to the coronavirus pandemic.
Think of the situation like this: Coronavirus could make a building unsafe, which is the precursor event to the local authorities shutting down businesses temporarily. This causes real damage. Put another way, it is the pandemic and civil authority exercised thereof directly causing physical damage.