SCRANTON – A Lackawanna County neurology practice has filed litigation against its insurance carrier for failure to cover losses it sustained, due to closures associated with the COVID-19 pandemic.
Professional Neurological Associates, Inc. of Dickson City filed suit in the Lackawanna County Court of Common Pleas on Feb. 12 versus Erie Insurance Exchange, of Erie.
The plaintiff medical practice purchased a one year-long Ultrapack Plus Commercial General Liability Policy from Erie Insurance Exchange to cover the time period of Sept. 20, 2019 to Sept. 20, 2020
“The policy is an ‘all risk’ policy which provides coverage for losses to the insured premises unless specifically excluded. The policy does not exclude losses caused by the coronavirus pandemic. The policy provides coverage for the losses incurred by plaintiff as result of the coronavirus pandemic and the actions of the government in response thereto,” the suit states.
“In a blatant breach of its insurance obligations that it voluntarily undertook in exchange for plaintiff’s premium payments, defendant has denied plaintiff’s claims arising out of the state-ordered interruption of its business. As a result, plaintiff now brings this action against the defendant for its failure to honor its obligations under the ‘Ultrapack Plus Commercial Property Coverage’ portion of the policy issued to plaintiff, which covers ‘direct physical loss of or damage to’ the premises. ‘Loss is defined as ‘direct and accidental loss of or damage to commercial property.”
In March 2020, the plaintiff suspended its business operations in response to an order from Gov. Tom Wolf that mandated the closure of all non-life sustaining businesses to reduce the spread of COVID-19. The plaintiff asserts that it sustained significant and ongoing losses due to the mandatory closure, and invoked the business income, civil authority and extra expense provisions of its insurance policy.
The following June, the governor lifted the stay-at-home orders and allowed non-essential businesses to open in Lackawanna County. In August, the plaintiff submitted a claim for income losses to the defendant, and the defendant denied the claim in December.
“The closure orders closing all ‘non-essential’ businesses were made in direct response to the continued and increasing presence of the coronavirus on property, including property around plaintiff’s premises,” per the suit.
“As a result of the closure orders, plaintiff has suffered substantial business income losses and incurred extra expenses. The covered losses incurred by plaintiff and owed under the policy is increasing every day. As a result of these catastrophic losses, plaintiff was forced to furlough its workers and halt normal business operations.”
For counts of declaratory judgment and breach of contract, the plaintiff is seeking damages in excess of $50,000, plus interest, costs and such other relief as the Court deems appropriate.
The plaintiff is represented by Marion K. Munley, Daniel W. Munley, Caroline Munley, John M. Mulcahey, Katie Nealon and Ciara L. DeNaples of Munley Law, in Scranton.
The defendant has not yet secured legal counsel.
Lackawanna County Court of Common Pleas case 2021-CV-00628
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com