Wildfire Smoke Constitutes “Direct Physical Loss”

An Oregon federal court decision deemed “air” physical property covered by a property insurance policy, in holding that wildfire smoke infiltration of an outdoor theater caused a physical loss of property.

The policyholder, an outdoor theater, claimed it suffered a property loss because it had to cancel several shows when smoke from nearby wildfires filled its audience seating and stage areas. Although the wildfires caused ash and soot to accumulate on outdoor seating and flooring, and in ventilation, lighting and electronic systems in the interior …

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