Pennsylvania High Court Deals Potential Blow To Carriers’ Denial Of Business Income Claims
Friday, May 1st, 2020 Catastrophe LitigationIn a case where no insurance company or insurance claim was involved, the Pennsylvania Supreme Court issued a ruling that could potentially negate one of the insurance industry’s standard bases for denial of coverage of business income claims—i.e. that COVID-19 did not result in “direct physical loss to insured property.”
The decision will likely be used in suits across the country challenging the blanket coverage denials to businesses who sustained massive losses due to forced closures by executive orders and the shutdown of the American economy.
In Friends of DeVito, et al v. Tom Wolf, Governor, et al, (Case No. 2020) four parties brought an emergency petition for relief against the Governor’s order that shutdown “non-life sustaining” businesses due to the Coronavirus. The petitioners included a committee for a candidate for a seat in the United States House of Representatives (DeVito) whose campaigns offices were forced to be closed pursuant to the Order while the incumbent and her offices were not subject to the Order, allowing her to maintain her offices, staff and equipment; a real estate agent; and a public golf course/restaurant that must continue to maintain its facilities despite the loss of income from paying customers.
