Pennsylvania Supreme Court Rules No Insurance Coverage for COVID Shutdown Losses Without Physical Damage
In a landmark decision, the Pennsylvania Supreme Court has ruled that a dentist is not entitled to insurance coverage for losses caused by the COVID-19 shutdown without physical damage to the property. The court emphasized that insurance policies require a physical alteration to the property to trigger coverage, rejecting the argument that loss of use alone qualifies.
The Pennsylvania Supreme Court recently ruled against a dentist seeking insurance coverage for business losses incurred during the COVID-19 pandemic. The Pennsylvania dentist had filed a claim with CNA and Valley Forge Insurance Co after he was forced to close his practice due to government-mandated shutdowns, except for emergency dental procedures. The dentist argued that the loss of use of his office constituted a “physical loss,” which should have triggered coverage under his insurance policy. While the trial court and the appellate Superior Court sided with the dentist initially, interpreting the policy’s language as ambiguous, the Supreme Court reversed these rulings.
The high court’s decision hinged on the requirement of “direct physical loss of or damage to property” as specified in the insurance policy. The justices ruled that for coverage to apply, there must be a physical alteration, deterioration, or loss of function in the insured property. Since the dental offices did not sustain any physical harm or alteration and the dentist retained access to them for emergency procedures, the court found that the policy did not cover his COVID-related business losses. The court noted that the financial losses were due solely to the government shutdown and not any physical condition affecting the properties.
This ruling aligns with decisions from other courts nationwide, affirming that pure economic loss from pandemic restrictions does not meet the criteria for insurance coverage without physical damage to the property. Click here to read more.
