A W.R. Berkley Corp. unit is obligated to provide coverage to a solar panel company because of the business interruption that occurred when its solar panels were shut down following a fire, a federal district court ruled.

The U.S. District Court in Boston, however, dismissed a bad faith claim by Littleton, Massachusetts-based NextSun Energy Littleton LLC against W.R. Berkley Co. unit Acadia Insurance Co., according to Wednesday’s ruling in NextSun Energy Littleton, LLC v. Acadia Insurance Co.

In May 2016, a fire occurred on the roof of a NextSun facility that damaged 88 of the 6,050 panels on one of its arrays, but caused no damage to the 5,742 solar panels in a second array, the ruling said.

Both arrays were given “red-tag” orders for their shutdown by Littleton town officials. One array was offline for a nine-day inspection period, while the fire-damaged array was offline for 41 days, and the fire-damaged panels were offline for 133 days, the ruling said.

Acadia agreed to pay $31,044 for the direct physical damage under its commercial inland marine insurance policy, but disagreed as to the amount it had to pay for the lost energy-generating income, with the amount in dispute between the insurer and company totaling $257,971, the ruling said.

NextSun filed suit against the insurer. The insurer’s line of reasoning in denying coverage for the loss “ignores the ‘plain and ordinary’ language of the policy,” the court said, in citing an earlier case and ruling in NextSun’s favor on the breach of contract claim

It agreed, however, to dismiss the bad faith claim “because there is no evidence that defendant acted in bad faith during this dispute with plaintiff over the insurance policy,” the ruling said. “The incorrect denial of insurance claim, without more, does not rise to the level of bad faith or unfair dealing,” it said.

NextSun attorney Steven J. Torres, a partner with Torres, Scammon & Day LLP in Boston, said, “We’re very pleased” the court agreed the claim fell within the policy’s coverage.  The ruling was “well-reasoned,” he said.

Acadia’s attorney had no comment.