Another Court Rejects COVID-19 Business Interruption Coverage Claim

Another court has rejected a business interruption coverage claim based upon a COVID-19 government mandated closure of a business.

In the case of Khan v. Pennsylvania Nat'l. Mut. Cas. Ins. Co., No. 1:20-CV-781 (M.D. Pa. Feb. 8, 2021 Jones, J.), the court ruled that there is no coverage due under an all-risk policy given that there was no “direct physical loss of or damage to property” as a result of the COVID-19 related closure of a restaurant. 

The court additionally noted that, even if there was coverage under the case presented, the claims at issue would be subject to the policy's virus exclusion to void coverage in any event.

As such, the court granted the carrier’s motion to dismiss.

At the outset of his Opinion, Judge Jones noted that a "vast majority of courts analyzing these claims have sided with the insurers, largely agreeing that the commercial insurance policies unambiguously foreclosed coverage where the business property suffered no physical damage or any tangible injury other than pure economic loss."  See Op. at 1.

Anyone wishing to review a copy of this decision may click this link.


Thanks to Lee Applebaum of the Philadelphia law firm and Fineman Krekstein & Harris for bringing this case to my attention. Attorney Applebaum is the writer of the excellent Pennsylvania New Jersey Insurance Bad Baith Case Law blog which can be viewed HERE.