Without providing a substantive rationale, a state court judge in Philadelphia has refused to preliminarily dismiss a bar’s COVID-19 business interruption lawsuit brought against certain London Market underwriters.

In a two-page order, the court in Taps & Bourbon on Terrace LLC v. Certain Underwriters at Lloyd’s, London, No. 200700375 (Phila. C.C.P. Oct. 26, 2020) determined that it would be “premature” to address the insurer’s factual contentions. “Taking the factual allegations made [in] the plaintiff’s complaint as true, as this court must at this time, plaintiff has successfully pled to survive this stage of the proceedings. Moreover, the law and facts are rapidly evolving in the area of COVID-19 related business losses.”

The court’s decision to deny the dismissal motion means that the case will proceed to discovery. The underwriters denied coverage based on the absence of “physical damage or loss” and the inclusion of a virus exclusion in the policy.

While the ruling does not entitle the insured to coverage, the decision runs counter to the trend nationwide, whereby a majority of courts have dismissed similar claims at an early juncture. In Wilson v. Hartford Casualty Co., No. 20-3384 (E.D.Pa. Sept. 30, 2020), for example, a federal court in Pennsylvania recently dismissed a COVID-19 business interruption lawsuit based on the application of a policy’s virus exclusion.

Clark & Fox, which is not involved in the Taps & Bourbon lawsuit, continues to monitor developments in COVID-19 litigation. Contact John Clark at jclark@clarkfoxlaw.com or Michael Savett at msavett@clarkfoxlaw.com for more information.