Wednesday, October 27, 2021

COVID-19 Business Interruption Coverage Claim Dismissed


In the case of Infinity Real Estate, LLC v. Travelers Excess & Surplus Lines Co., No. 2:20-CV-06398-CMR (E.D. Pa. Sept. 13, 2021 Rufe, J.), the court granted a Defendant’s Motion to Dismiss in a business interruption coverage case related to the COVID-19 pandemic. 

The Plaintiff asserted that it suffered a loss of rental income when its commercial tenants were forced to shut down or limit operations in response to government orders issued during the COVID-19 pandemic. The Plaintiff filed a claim with the Defendant carrier, who denied coverage. The Plaintiff then filed suit.

The court agreed with the Defendant’s Motion to Dismiss after ruling that, under the policy, the Plaintiff was only entitled to coverage for loss of business or rental income caused by physical loss of property or by civil authority orders.

The court noted that, although the COVID-19 shutdown Orders were issued by a civil authority, the court noted that the Orders were motivated by the pandemic, meaning that the Plaintiff’s loss of income was caused at least indirectly by a virus. The court otherwise noted that the policy contained a virus exclusion, which was applicable in this matter.

The court in this matter also ruled that the COVID-19 shutdown Orders did not cause a direct physical loss of the Plaintiff’s properties, which was required under the policy for coverage to be implicated.

As noted, the court granted the Defendant’s Motion to Dismiss.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Oct. 5, 2021).


Source of image:  Photo by Tim Mossholder from Pexels.com.

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