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Attorneys Push for Quick Ruling on Business Interruption Insurance for COVID-19

gavel in courtroomA group of attorneys has filed a petition with Pennsylvania’s Supreme Court asking for the justices to use their King’s Bench powers to get involved in a dispute between a Pittsburgh restaurant owner and his insurance company over a business interruption insurance claim.

The restaurant owner is seeking compensation for losses caused by the statewide closures ordered by Pennsylvania Governor Tom Wolf. He filed a lawsuit in the Allegheny County Court of Common Pleas seeking declaratory judgment before filing this petition.

The petition says a ruling by the Supreme Court could provide guidance that would apply to hundreds or potentially thousands of lawsuits that could result from the closures mandated by the governor.

The group of attorneys consists of Schmidt Kramer partner Scott Cooper and attorneys from three other law firms.

The restaurant owner is seeking a ruling on whether Erie Insurance should cover disruption of his business, as the policy does not have an exclusion for virus-related losses. The owner’s lawyer is also seeking to consolidate insurance claims related to the COVID-19 shutdown to a single court in the state to help speed up the process.

According to Cooper, a decision by the supreme court could prevent conflicting rulings from county courts and federal district courts. These rulings would require claimants to go through appeals to attempt to obtain a favorable verdict. Federal courts will likely make rulings based on what they think the supreme court might do.

Cooper said this would be a good case to rule on because the insurance policy in question does not have an exclusion for viruses. The restaurant owner also has an all risk policy that covers any losses that are not specifically excluded by the policy, which is typical for businesses all over the state.

Although the supreme court rarely uses its King’s Bench jurisdiction to take up cases, they recently did so in a lawsuit challenging the governor’s order shutting down non-life-sustaining businesses. The supreme court ruled in April that the governor’s order could stand.