A US District Court judge has denied the Philadelphia Eagles’ motion to reconsider their COVID-19 business interruption coverage lawsuit against Factory Mutual Insurance Co. The ruling reaffirms the court’s previous decision in favor of the insurer.
The Eagles filed the motion in November, seeking to overturn the court’s October decision rejecting their case. In their motion, the team argued that their FM Global policy differed from others reviewed in similar business interruption lawsuits.
The team also referenced a Third Circuit Court of Appeals decision that found coverage could apply if a business’s operations were completely unusable due to the presence or threatened release of an invisible substance.
FM Global countered the team’s arguments, stating that the Eagles’ reconsideration attempt did not meet the legal standards required for a reversal. In the court order, FM Global said the Eagles “fumbled its reconsideration attempt.”
Judge Michael M. Baylson upheld the earlier decision, ruling that the Eagles failed to demonstrate the physical alteration required under state law to trigger coverage. He noted that the team could not show physical disappearance, deterioration, or injury to the covered property, nor the absence of physical function.
According to AM Best, Baylson cited prior rulings from the Pennsylvania Supreme Court and the Third Circuit, which held that without physical alteration or near dispossession, coverage under business interruption policies does not apply.
“This court and others have already called the play: no physical alteration or near-dispossession, no coverage touchdown,” Baylson wrote in his ruling.
The decision aligns with the majority of rulings across the country that have favored insurers in COVID-19 business interruption cases.
However, there have been exceptions, including a recent decision by the North Carolina Supreme Court, which granted partial summary judgment to a group of restaurants. That court found that the presence of the virus and government-ordered shutdowns constituted direct physical losses under their policies.
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