Alaska
Alaska Supreme Court says most business insurance doesn't cover COVID-19 damages • Alaska Beacon
In a first-of-its-kind ruling, the Alaska Supreme Court said Friday that the COVID-19 pandemic does not qualify as “physical loss” or “damage” under common commercial insurance policies.
The decision likely means that insurance companies will not have to pay most claims related to business losses caused by COVID-19.
The ruling came in response to an unusual “certified question” request from Alaska’s U.S. District Court. All 49 other state supreme courts have considered similar questions about COVID-19 liability, but until Friday, Alaska’s had not.
“Even with our insured-friendly approach to interpreting insurance contracts, we conclude that neither the presence of the COVID-19 virus at an insured property nor operating restrictions imposed on an insured property by COVID-19 pandemic-related governmental orders is ‘direct physical loss of or damage to’ property. ‘Direct physical loss of or damage to’ property requires a tangible or material alteration of property,” wrote Justice Susan Carney on behalf of the court.
The court’s decision, rendered unanimously, has major financial implications: If the court had decided differently, the ruling could have allowed businesses to collect millions of dollars from their insurance policies to cover the costs of COVID-mandated closures and health restrictions.
In an amicus brief, the American Property Casualty Insurance Association said insurance premiums would rise as a result if insurers were required to pay out more.
The Supreme Court was asked to rule after Baxter Senior Living filed suit two years ago against its insurance company, Zurich American.
Baxter operates a senior home in Anchorage and spent money to enact anti-COVID procedures that also limited its operations. Local anti-COVID rules also restricted its operations. The company filed a claim in 2020 with Zurich American, but the company denied the claim.
At the time, Zurich American said Baxter’s policy covered “direct physical loss of or damage to” property, and it argued that “(n)either the mere presence of the COVID-19 virus … or any generalized threat from its presence constitutes the ‘direct physical loss of or damage to’” Baxter’s property under the policy.
Baxter challenged the denial in state court, and the insurer moved the case to federal court, which then asked the Alaska Supreme Court to decide whether the presence of COVID-19 constitutes “direct physical loss” or “damage” to property, and whether governmental orders pertaining to COVID-19 also constitute that loss or damage.
“Our answer to both questions is ‘no,’” Carney wrote in Friday’s published order.
Explaining at length, the order says that meeting the policy’s standard language requires “a physical alteration of property,” and COVID-19’s presence on a surface doesn’t alter its property.
“An analogy between the COVID-19 virus and water illustrates this point,” Carney wrote in Friday’s order. “COVID-19 is to property what water is to a plastic sheet: water does nothing to a plastic sheet but at most, it stays on it or attaches to it. But water transforms, alters, or changes the state of dry paper into a wet “mush” or makes it much easier to tear.”
“We conclude that ‘direct physical damage’ requires physical alteration of property. But because COVID-19 does not physically alter property and merely attaches to it, the presence of COVID-19 on property does not constitute ‘direct physical damage.’”
Friday’s order marked the first time since 2021 that the court had been asked to consider a certified question from the state’s federal court.
With the question resolved, the case returns to federal court for further proceedings.
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At Icy Strait Point, visitors can spot whales and eagles while supporting a small Alaska community.
How cruise tourism could help and hurt Alaska’s environment
Although Alaskans rely on revenue tourism cruise ships bring in, some locals are raising concerns on the impact of tourism on Alaska’s environment.
Icy Strait Point in Hoonah, Alaska, offers a rare kind of cruise stop — one where nature, culture, and community take center stage. It was also specifically developed with tourists in mind.
Built on Huna Tlingit land near Hoonah, this privately owned destination was designed to spread visitors across 23,000 acres of wilderness rather than overwhelm the town. The result is a place where travelers can see bald eagles, sea lions, and crashing waves instead of traffic and tour buses.
Beyond its dramatic scenery, Icy Strait Point generates about $20 million in annual economic impact for a community of roughly 900 people, supporting hundreds of jobs, making it a model for how tourism can benefit residents while preserving Alaska’s character.
Why it matters
Located on Huna Tlingit land, Icy Strait Point shows how tourism can support small communities while preserving their identity. Places like this reflect a broader American story of stewardship, self-determination, and economic opportunity.
According to Icy Strait Point’s Senior Vice President, Tyler Hackman, the destination generates “$20 million a year of positive economic impact on a community of 900 people,” creating jobs while allowing Hoonah to remain distinctly itself.
What to see today
Unlike many cruise ports, Icy Strait Point feels remarkably undeveloped.
“This place is mostly untouched,” Hackman said. “When a ship comes into a dock here, somebody can be standing on the top deck of the ship, and you don’t see a parking lot, you don’t see a bus, you don’t see a vehicle.”
Visitors can take a gondola to the mountaintop for sweeping views, then follow Hackman’s advice and head to the beach in front of the historic cannery. There, they can search for shells, dip their hands in Alaska’s icy waters, and take in snowcapped peaks on the horizon — and maybe spot a humpback whale or an orca.
Ask a local
For a sweet stop with a bigger purpose, visit Lil’ Gen’s Mini-Doughnuts.
Operated by The Salvation Army, the shop serves warm mini-doughnuts to cruise visitors all summer. The impact extends far beyond dessert: Hackman said that in 2025, profits from the shop helped fund “$130,000 worth of food to the local community.”
It’s a delicious way to support Hoonah residents directly. Try the lemon sugaring.
Plan your visit
- Best time: May through September during the Alaska cruise season.
- Hours/admission: Open seasonally. Access is included with most cruise itineraries.
- Getting there: Primarily reached by cruise ship from Southeast Alaska itineraries.
- Learn more: https://icystraitpoint.com/
Governor Mike Dunleavy today announced the appointment of Stephen Cox as his new Counsel to the Governor. The appointment comes after the legislature’s decision to not confirm him as attorney general, despite his extensive legal and public policy experience and proven record of defending Alaska’s interests both at home and on the national level. Cox’s responsibilities will be to advise Governor Dunleavy on a wide range of legal, regulatory, and constitutional matters affecting the State of Alaska.
Governor Dunleavy also appointed Cori Mills acting attorney general for the Alaska Department of Law. Mills has been with the department for 14 years and most recently served as deputy attorney general.
“Stephen Cox has a strong understanding of Alaska law and the challenges facing our state,” said Governor Dunleavy. “His experience, professionalism, and commitment to public service make him a valuable asset as Counsel to the Governor. I look forward to working with Stephen as we continue advancing policies that strengthen Alaska’s economy, uphold the rule of law, and serve the people of our state.”
As Counsel to the Governor, Cox will continue to work closely with the Department of Law and other executive branch departments to provide counsel on policy initiatives, legislation, and executive actions.
“I am honored to serve Governor Dunleavy and the people of Alaska in this new role,” said Stephen Cox. “I look forward to continue supporting the administration’s efforts to promote responsible resource development, governance and opportunities for Alaskans across the state.”
Cox assumes his new role effective today.
Juneau blends towering glaciers, the Tongass National Forest and rich Indigenous culture.
How cruise tourism could help and hurt Alaska’s environment
Although Alaskans rely on revenue tourism cruise ships bring in, some locals are raising concerns on the impact of tourism on Alaska’s environment.
Juneau, Alaska, is the only U.S. state capital not accessible by road — a remoteness that adds to its magic and appeal.
Nestled between mountains, rainforest, and the waters of the Inside Passage, Juneau combines Alaska Native heritage, Gold Rush history, and some of the state’s most spectacular scenery.
Visitors can watch humpback whales surface offshore, ride a tram above downtown, stand face-to-face with or even on Mendenhall Glacier, a river of ice flowing from the vast Juneau Icefield. Surrounded by the Tongass National Forest — the world’s largest temperate rainforest — Juneau offers a quintessential Alaska experience where nature feels immense, and adventure begins just minutes from the cruise dock.
Why Juneau matters
Long before prospectors arrived in search of gold, the area now known as Juneau was home to the Áak’w Kwáan, whose name for this place — Áakʼw, often translated as “little lake” — reflects a deep connection to the surrounding land and water.
Russia later expanded into Alaska through the fur trade, bringing Orthodox missionaries, new trade networks, and profound cultural change to Indigenous communities across the region. Though Juneau rose to prominence during the Gold Rush and became the territorial capital after the United States purchased Alaska in 1867, the city still bears traces of both worlds.
As the nation approaches its 250th anniversary, Juneau offers visitors a richer understanding of America’s layered history — one that’s shaped by Native stewardship, Russian influence, and the enduring resilience of southeast Alaska’s Indigenous peoples.
What to see today
The star attraction is Mendenhall Glacier, a 13.6-mile-long glacier that descends from the Juneau Icefield into a turquoise lake.
Easy trails lead to roaring Nugget Falls, while boardwalks along Steep Creek offer chances to spot spawning salmon and black bears. Back downtown, colorful floatplanes skim the harbor and the Mount Roberts Tramway lifts visitors above the city for sweeping views of Gastineau Channel and the surrounding mountains.
Ask a local
One of Juneau’s most whimsical attractions is Glacier Gardens Rainforest Adventure, tucked into the Tongass rainforest just outside downtown.
Locals and visitors alike love the upside-down trees known as “Flower Towers” — massive spruce trunks planted root-side up, bursting with colorful blooms. The display is a unique (and accidental) creation of master gardener Steve Bowhay.
It’s an eccentric sight that feels uniquely Alaskan, blending lush rainforest scenery with a touch of horticultural imagination.
Plan your visit
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