PHILADELPHIA – A Phoenixville dental office has lost its case to compel its insurer to compensate it for professional losses sustained due to the COVID-19 pandemic.
A Dec. 7 ruling from U.S. District Court for the Eastern District of Pennsylvania Judge Joshua L. Wolson explained while the Court “sympathizes” with plaintiff Kessler Dental Associates, it “cannot ignore that Kessler Dental purchased an insurance policy that does not cover the losses that it suffered.”
Kessler Dental operates a dental practice in Phoenixville and receives commercial property insurance coverage from The Dentists Insurance Company, under a policy which took effect in January.
Among other things, the policy includes Loss of Income coverage that provides coverage in the event of certain interruptions to Kessler Dental’s business. It includes both Dental Practice Income loss coverage and Civil Authority loss coverage.
It also includes a Virus Exclusion that excludes coverage for any “loss or damage, including economic loss, caused by any virus, bacteria or other microorganism that cause or could cause physical illness, disease or disability.”
As a result of COVID-19 orders issued by the Commonwealth of Pennsylvania and based on the Department of Health guidance, Kessler Dental had to close its office for all non-emergency dental services and submitted a claim for its lost income during the suspension period.
On May 20, Dentists Insurance denied Kessler Dental’s claim because it did not satisfy the policy’s Dental Income or Civil Authority coverage provisions and was also subject to the policy’s Virus Exclusion.
As a result, Kessler Dental filed legal action for breach of contract against Dentists Insurance in October, and the insurer then motioned to dismiss the case.
“Kessler Dental has not satisfied either element [of being a loss or damage, as it pertains to its expenses]. Although it alleges that [trade groups] made false statements to Pennsylvania state regulators seeking the adoption of the Virus Exclusion, it does not allege that Dentists Insurance was a member of either group or that either group represented Dentists Insurance,” Wolson said.
“Kessler Dental did not close its dental practice. In fact, no order ever required dental practices to close. Rather, Kessler Dental was able to stay open for emergency procedures. Kessler Dental’s business structure was inhabitable and usable, though on a limited basis. Thus, Kessler Dental has not pled facts that COVID-19 caused physical damage to its business to trigger Dental Practice Income coverage under the Policy.”
Wolson said circumstances could not change the terms of its chosen insurance policy.
“The COVID-19 pandemic might be unprecedented, particularly in its impact on businesses large and small. But it is not a writ for the Court to rewrite the policy to which Kessler Dental and Dentists Insurance agreed. That policy does not provide coverage for the losses that Kessler Dental has suffered. The Court will grant Dentists Insurance’s motion to dismiss this case,” Wolson said.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-03376
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com