A Pennsylvania state court refused Tuesday to dismiss a COVID-19 business interruption lawsuit filed by a gym against its insurer, stating the business had sufficiently alleged a “direct physical loss or damage” to its property.
Brown’s Gym Inc. in Clarks Summit, Pennsylvania, filed suit against Cincinnati Insurance Co., which had issued it an all-risk policy that did not include a virus exclusion, in the Court of Common Pleas of Lackawanna County in Scranton, Pennsylvania, according to the ruling in Brown’s Gym Inc. v. The Cincinnati Insurance Co. and C.C. Young and Henkelman Insurance.
Cincinnati had denied Brown’s COVID-19 business interruption coverage claims on the basis it had not sustained a direct physical loss or damage.
The court disagreed. While the policy does not include a virus exclusion, it does contain a “communicable disease or virus” exclusion for other “crisis event response communication expense coverage,” it said.
This created “a reasonable