Friday, March 11, 2022

Daycare and Preschool Loses Bid To Secure Coverage Under Its All-Risk Policy for COVID-19 Losses

In the case of BSD-360, LLC v. Phila. Indem. Ins. Co., No. 20-4719 (E.D. Pa. Jan 13, 2022 Pratter, J.), an insurance carrier’s Motion to Dismiss was granted in a COVID-19 coverage case after the court ruled that the “insured gets what protection he pays for” and found that, while the policy in question covered losses for property damages and contains provisions related to communicable diseases, the Court found that the Plaintiff's claims were not covered.

According to the Opinion, the insured in this case was a daycare and preschool facility.  The court noted that the insured has purchased an “all-risk insurance policy.”

In early 2020, the daycare was forced to suspend operations due to the COVID-19 global pandemic. The insured sought to recovery under its insurance policy and the carrier denied the claim.

When the claim was denied, the insured sued both the insurance company and its insurance broker.

As noted above, the court found that the insured’s claim was not covered under the plain language of the insurance contract.  The Court noted that there was no claim that there was an "outbreak" of a communicable disease on the insured's premises or any "physical loss" of the premises.  As such, the case against the insurance company was dismissed under an application of New Jersey law.

After reviewing the records, the court also found that the Plaintiff had not alleged any negligence on the part of its insurance broker. As such, the broker’s Motion to Dismiss was also granted although this decision was based on an application of Pennsylvania law.

No leave to file an Amended Complaint was granted.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

I send thanks to Attorney John Gerard Devlin of the Philadelphia law firm of Devlin Associates, P.C. for bringing this case to my attention.

Source of image:  Photo by Magda Ehlers on

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.