COVID-19 (CORONAVIRUS)
Judge Rejects Eagles ‘Fumbled’ COVID-19 Business Interruption Reconsideration Request
PHILADELPHIA //BestWire// - A U.S. district court judge rejected a request to reconsider a COVID-19 business interruption coverage lawsuit filed by NFL team Philadelphia Eagles against Factory Mutual Insurance Co.
The team made its motion for reconsideration in November after the U.S. District Court for the Eastern District of Pennsylvania rejected the team’s case in October (BestWire, Nov. 18, 2024).
In seeking reconsideration, the team said its FM Global policy differed from policies reviewed by courts in business interruption suits. The team also pointed to a Third Circuit Court of Appeals decision finding that coverage can be applied, in part, if a business’ operations were wholly unusable because of the threatened release of an invisible substance.
FM Global said the team “fumbled its reconsideration attempt,” according to the most recent court order.
Previous COVID-related business interruption lawsuits and decisions from the Pennsylvania Supreme Court and U.S. Court of Appeals for the Third Circuit have “already called the play: no physical alteration or near-dispossession, no coverage touchdown,” Judge Michael M. Baylson wrote in his ruling against reconsideration.
Baylson agreed with FM Global, noting in the order that the Eagles failed to meet the requirement for physical alteration as stipulated by state law; did not demonstrate physical disappearance, physical deterioration or absence of physical function of the covered property; and couldn’t show physical harm or injury to the covered property.
This ruling largely falls in line with rulings from courts around the country that found in favor of carriers in similar COVID-related business interruption suits. A recent outlier was the North Carolina Supreme Court, which granted partial summary judgement to a group of restaurants and said the virus and government-ordered shutdowns did constitute direct physical losses as defined by their policies (BestWire, Dec. 16, 2024).
FM Global declined to comment on the most recent ruling.
Operating entities of Factory Mutual Insurance Co. have a current Best's Financial Strength Rating of A+ (Superior).
(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)