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insurance policy

Pointing to an insurance policy’s “unambiguous” language centered on its insured restaurant’s “physical” losses, a Pennsylvania federal court has dismissed the restaurant’s legal claims saying the insurer owed it loss coverage after public officials urged people to stay at home because of the coronavirus.

The court “conclude[s] that the phrase ‘physical loss of or damage to property’ [found in the policy’s 'business income' coverage provision] unambiguously requires some issue with the physical premises that impedes business operations and causes a loss of business income,” wrote U.S. District Judge John Jones III of the Middle District of Pennsylvania in the 26-page opinion.

Jones later noted that the U.S. Court of Appeals for the Third Circuit has “not yet ruled on any COVID-19 insurance disputes,” but stated that “to rule here that a building without any presence of the COVID-19 virus was rendered physically or functionally unusable [after officials’ stay-at-home recommendations and warnings] such that plaintiffs [the restaurant company and its owner] sufficiently alleged a ‘distinct loss’ would squarely contradict the Third Circuit’s holding” in the 2002 decision of Port Authority of New York and New Jersey v. Affiliated FM Insurance.

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Jason Grant

Jason Grant is a staff writer covering legal stories and cases for the New York Law Journal, the National Law Journal and Law.com, and a former practicing attorney. He's written and reported previously for the New York Times, the Star-Ledger, the L.A. Times and other publications. Contact him at [email protected] On Twitter, pls find him @JasonBarrGrant

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