The Pennsylvania Supreme Court has issued a significant ruling on insurance coverage related to COVID-19 business interruptions. In a unanimous decision, the court rejected a dentist’s claim for insurance compensation due to pandemic-related shutdowns.
What the PA Supreme Court Decision Is About
This landmark case, Ungarean v. CNA and Valley Forge Insurance, marks the first time the state’s highest court has addressed COVID-19 business interruption insurance claims. As a result of this case, the court’s interpretation of “direct physical loss of or damage to property” in insurance policies is much clearer.
The justices determined that for coverage to apply, there must be actual physical alteration or damage to the insured property. They ruled that financial losses alone, without physical harm to the premises, do not trigger insurance coverage under the policy in question.
This Decision Overturns a Previous Superior Court Ruling
This decision overturns a previous Superior Court ruling that had favored the policyholder. The Supreme Court’s interpretation emphasizes that standard commercial property insurance policies require tangible, physical damage for claims to be valid.
Scott Cooper, Co-Counsel for the Plaintiff, Says It’s Unfortunate
Attorneys representing the dentist expressed disappointment with the outcome. Scott B. Cooper of Schmidt Kramer in Harrisburg, co-counsel for the plaintiff, commented on the ruling: “It’s unfortunate that insurance companies get away with writing policies in a way that they can pick and choose when they want to provide coverage.” This statement highlights the frustration felt by many policyholders in similar situations.
A Precedent Has Been Set in Pennsylvania
This ruling sets a precedent for similar cases in Pennsylvania, potentially affecting how businesses can claim insurance for pandemic-related losses. It underscores the importance of understanding policy language in extraordinary circumstances like a global pandemic.