On The Same Day Pennsylvania Superior Court Rules in Favor of COVID-19 Related Business Interruption Coverage

In the case of Ungarean v. CNA and Valley Forge Ins. Co., No. 490 WDA 2021 (Pa. Super. Nov. 30, 2022) (en banc), the court ruled in favor of a Plaintiff on a business interruption coverage claim related to business losses suffered when the business was closed by governmental orders issued during the COVID-19 pandemic.

According to the Opinion, this case involved a dental practice.

In this matter, the Pennsylvania Superior Court affirmed a lower court’s finding that the Plaintiff dental practice’s Motion for Summary Judgment on the coverage issues should be granted.

The lower court and the appellate court found that the dental practice was entitled to business interruption coverage because COVID-19 and the related governmental orders had caused the Plaintiff to suffer a direct physical loss of his dental practice, which circumstances were found to be within the scope of coverage provided by the CNA policy.

The trial and appellate court also agreed that the exclusions relied upon by CNA were not applicable. Those exclusions included the contamination, consequential loss, fungi, wet rot, dry rot, microbes, and the acts of decisions, ordinance or law exclusions.

Of note, in a footnote 3 the Pennsylvania Superior Court pointed to a decision by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas in the case of SWB Yankees v. CNA Fin. Corp., 2021 WL 3468995 (C.P. Lacka. Co. 2021) as confirming another way that insureds may demonstrate that they have satisfied the “direct physical loss or damage” to cover property in order to secure coverage.

Anyone wishing to review a copy of this decision may click this LINK.  The Dissenting Opinion can be viewed HERE