Pittsburgh Eatery Nabs Win for Covid Loss Insurance Coverage

A downtown Pittsburgh bar won a state court ruling that compels its insurance company to cover pandemic-related losses, scoring a rare business win over their insurers on Covid coverage.

Grant Street Tavern, owned by MacMiles LLC, had an all-risk policy from Erie Insurance Exchange covering “direct physical ‘loss’ of or damage to Covered Property,” according to a ruling issued Tuesday by Judge Christine Ward of the Court of Common Pleas of Allegheny County.

Such a loss would include the tavern’s inability to use its premises due to Covid-19 safety concerns, Ward said.

Businesses nationwide have sued their insurers to seek coverage for financial losses stemming from Covid-19 related closures. The tavern’s victory marks a rare court win for businesses, as judges have predominantly sided with insurers that claim policies exclude such coverage terms.

Grant Street closed its doors in March 2020, following the state government’s mandates for most businesses to shut down to prevent the spread of the virus.

Erie Insurance Exchange denied Grant Street’s claims. The bar then sued the insurer in September 2020 for breach of contract.

Erie Insurance argued no coverage is warranted because the restaurant’s premises hadn’t sustained tangible damage from the pandemic that requires repairs or replacements, according to the ruling.

But the judge focused on the distinction between “loss” and “damage” within the insurer’s income protection clauses. She said she disagreed with some courts’ interpretation that coverage for “loss” or “damage” requires physical harm or destruction to property.

Ward granted one of the restaurant’s two motions for partial summary judgment.

“It is true that many other courts across the country have found otherwise, but we believe that this court got it right and properly interpreted the policy,” Jonathan Shub, an attorney representing MacMiles LLC, said.

Shub said he expects Erie Insurance Exchange to appeal the case to Pennsylvania Superior Court.

Ward previously granted a Pennsylvania dental practice its bid for coverage of Covid-related losses.

Erie Insurance Exchange and its attorneys didn’t immediately respond to requests for comment.

The case is MacMiles LLC vs. Erie Ins. Exch., Pa. Ct. Com. Pl., No. GD-20-007753, 5/25/21.