State appeals court upholds pro-policyholder COVID ruling

A Pennsylvania appeals court last week upheld a lower court ruling in favor of a dental office that sued CNA Financial Corp. for COVID-19-related business interruption coverage.

Last year, in Timothy A. Ungarean d/b/a Smile Savers Dentistry P.C. v. CNA and Valley Forge Insurance Co., the Court of Common Pleas of Allegheny County granted summary judgment to Dr. Ungarean.

CNA had argued that business interruption coverage should only be triggered if there was damage to the property.

Among other things, the policy stated that business interruption coverage was triggered “by direct physical loss of or damage to property at the described premises” and the lower court ruled that the use of the word “or” showed that the concepts of “loss” and “damage” were separate. Loss could be interpreted to include loss of possession, such as via COVID-19-related lockdowns that forced numerous businesses to close offices or suspend operations.

On Nov. 30, the Superior Court of Pennsylvania in Harrisburg upheld the lower court ruling.

The appeals court ruling stated that “based primarily on the trial court’s thoughtful opinion, we affirm the court’s order granting summary judgment and declaring that coverage is owed to Ungarean for his COVID-related business losses under the specific terms of the CNA Policy.”

CNA did not immediately respond to a request for comment.