Business Prevails on COVID-19 Business Interruption Claim and Insurer Appealing

Recently, a Judge in the Court of Common Pleas of Allegheny County ruled in favor of an insured business in its claim for business interruption coverage against its insurer arising out of the COVID-19 pandemic.  In that case, a dentist filed a claim for business losses allegedly arising from the decrease in income related to the COVID-19 pandemic and related Government Orders forcing a shutdown of a majority of the dentist’s business operations.  The insurer denied the claim, and the dentist sued for coverage.  Both parties moved for summary judgment, and the Court ruled in favor of the dentist, penning a technical opinion that focuses on the language of the specific insurance contract at issue.

As the Judge repeatedly noted, the insurance contract did not include a virus exclusion provision.  As a result, the insurer was left to argue first, that business losses from COVID-19 were not a covered loss, and second, that coverage was excluded under the policy’s exclusion provisions, in an attempt to fit the COVID-19 virus and its effects into other exceptions. 

This decision is a departure from the trend of cases finding in favor of the insurer—including other cases before other Pennsylvania courts.  However, as noted, the policy at issue was unique in that it did not include a virus exclusion.  The insurer has stated it will appeal the decision. 

Until an appellate decision is reached, the decision is not binding on courts outside of Allegheny County.  Further, the Court’s opinion was technical, based largely on a textual analysis of the contract at issue.  As a result, whether its analysis will be persuasive in other matters largely depends upon the language of the particular insurance contract at issue. 

Please contact a MacDonald Illig attorney if you have any questions in this regard.