The Pennsylvania Superior Court previously ruled that such circumstances do meet the definition of a “bodily injury” in this context.
The policy at issue in Lipsky v. State Farm Mutual Automobile Insurance provides coverage for "bodily injury to a person and sickness, disease or death which results from it."
Here is a LINK to the Superior Court’s previous Opinion (including the concurring and dissenting Opinions of the 2-1 decision), written by then President Judge Correale F. Stevens in the case.
Judge Stevens is now a member of the Pennsylvania Supreme Court, but did not participate in this matter when it came before the highest court. As such, there were only six Justices available to review the issue and, yes, they split down the middle.
On January 23, 2014, an evenly split six-justice Pennsylvania Supreme Court issued a per curiam Order indicating that it could not reach a consensus on the matter thereby allowing to stand the previous Superior Court ruling that a negligent infliction of emotional distress claim by plaintiff allegedly arising from the witnessing of a family member being killed by a car is indeed a distinct bodily injury covered by the tortfeasor’s automobile insurance policy. Anyone wishing to review the Supreme Court's Order may click this LINK.
Source: Article by Zack Needles, "Pa. High Court Stalemate Lets Emotional Distress Claim Stand." The Legal Intelligencer (1/27/14).
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