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This is another Covid-19 business loss coverage case, where the court found no coverage due.  After finding no coverage due, the bad faith claim was readily resolved in a few words, as we’ve seen in a number of recent cases summarized in this Blog on September 28, 2021, September 27, 2021, August 20, 2021, August 3, 2021, July 21, 2021, April 23, 2021, April 6, 2021, February 11, 2021, and January 19, 2021.

In this case, Eastern District Chief Judge Sanchez states:

The Court will also dismiss [plaintiff’s] bad faith claim. There is no bad faith unless an insured party presents “clear and convincing evidence that: (1) the insurer did not have a reasonable basis for denying benefits under the policy and (2) the insurer knew of or recklessly disregarded its lack of a reasonable basis.” Rancosky v. Washington Nat’l Ins. Co., 170 A.3d 364, 365 (Pa. 2017). Cincinnati Insurance’s position is widely supported in the case law. Its denial of coverage was therefore reasonable and [plaintiff] has failed to adequately plead the elements of bad faith.

Date of Decision:  September 22, 2021

Round Guys Brewing Company v. Cincinnati Insurance Company, U.S. District Court Eastern District of Pennsylvania No. CV 20-6252, 2021 WL 4306027 (E.D. Pa. Sept. 22, 2021) (Sanchez, C.J.)