NO COVERAGE DUE FOR COVID-19 CLAIMS, NO BAD FAITH CLAIM POSSIBLE (Middle District)
Middle District Judge Jones ruled that no Covid-19 coverage was due under an all-risk policy.
He found no “direct physical loss of or damage to property,” eliminating the possibility of coverage for business income losses or claims that the business closure resulted from a government order. Further, even if covered, the claims were subject to the policy’s virus exclusion.
Thus, Judge Jones held plaintiff failed to make out its claims for breach of contract, declaratory judgment, and breach of the implied duty of good faith and fair dealing, and granted the insurer’s motion to dismiss those claims. Although not a bad faith case, Judge Jones observed in a footnote, “[s]imilarly, Pennsylvania courts have held that if the insurer properly denied a claim, the policyholder is unable to state a bad faith claim.”