Wade Clark Mulcahy LLP

<p style="text-align: justify;">Following similar news resulting from the COVID-19 pandemic, a South Philadelphia restaurant, River Twice, has filed a declaratory judgment action against its insurer. In its complaint, River Twice is requesting that the U.S. District Court in Philadelphia declare its entitlement to business interruption coverage due to coronavirus losses.</p>
<p style="text-align: justify;">River Twice’s lawsuit against its insurer, which does not mention that a claim had previously been filed, is largely a preemptive move. The declaratory judgment complaint, filed on April 10, 2020, makes two arguments: that the virus damages property by living on surfaces for hours or days, causing potential danger, and the shutdown, which began on March 16, in Philadelphia, that was ordered by city and state authorities, also resulted in damages.</p>
<p style="text-align: justify;">River Twice’s lawsuit is representative of what other insureds have begun to argue in similar declaratory judgment actions against insurers, namely that the presence of the virus on surfaces for hours or days constitutes physical damage and, thus, triggers property damage coverage under their policies. We will continue to keep you updated as case law emerges in this new area of law.</p>
<p style="text-align: justify;">Thanks to Joseph Anzalone for his contribution to this post. If you have any questions or comments, please contact <a href="mailto:chayes@wcmlaw.com">Colleen Hayes.</a></p>