A popular beer garden in Center City Philadelphia has joined the growing number of companies suing their insurance carriers over claims that they say should be covered for business that was interrupted as a result of the COVID-19 pandemic.

The Independence Beer Garden has filed a class action lawsuit against Lloyd's of London in the U.S. District Court for the Eastern District of Pennsylvania, arguing policy holders are entitled to coverage for disruptions that occurred as a result of Gov. Tom Wolf's order that shut down nearly all businesses in the state. The suit, which was filed Wednesday, has been assigned to U.S. District Judge Chad Kenney.

According to Feldman Shepherd Wohlgelernter Tanner Weinstock & Dodig shareholder Alan Feldman, who filed the complaint, the beer garden is a seasonal business that has been unable to open given the government's shutdown orders.

"My client faithfully paid premiums for what he thought was excellent insurance coverage, expressly including coverage for any loss, or interruptions he suffered," Feldman said. "He suffered a very, very substantial loss."

READ THE COMPLAINT:

According to the 13-page complaint, the insurance policy did not contain any virus or pandemic exclusion, which, Feldman said, removes a significant hurdle that some of the other COVID-related insurance litigation has encountered.

Feldman said that, after the SARS outbreak, most insurance companies began including exclusions for viruses or bacterial outbreaks, but Lloyd's, he said, never included those exclusions in their coverage. Those exclusions have created a roadblock for some lawsuits pursuing coverage for COVID-related business disruption, but Feldman said the issue should be clear in this lawsuit.

"They had to be aware that virtually the entire balance of the insurance industry had gone to using a virus exclusion, so Lloyd's certainly could have [included a virus exclusion] had they chosen to do so," he said.

Another big issue that has come up in other litigation and is likely to come up in the suit against Lloyd's is whether there needs to be direct physical damage or loss to the property in order to recover the insurance. Feldman said arguments can be made that the virus is a form of physical damage, since the property will need to be cleaned and disinfected before opening, but he added courts, including the U.S. Court of Appeals for the Third Circuit, have taken a broader view of what constitutes damage for a business, and have not held there must be physical damage.

The suit joins several that have already been filed in Pennsylvania and elsewhere.

Last month, a group of lawyers suing Erie insurance on similar claims filed a petition asking the state Supreme Court to consider the issue. The petition said the policy is typical for business owners across the state, and a ruling from the justices could provide guidance for "hundreds, if not thousands" of lawsuits that are expected to result from the business closures.

The justices, however, denied that petition last week, and so the case is now pending in the Allegheny County Court of Common Pleas. Schmidt Kramer attorney Scott Cooper, who filed the petition along with Haggerty, Goldberg, Schleifer & Kupersmith attorney James Haggerty; John Goodrich of Goodrich & Associates; and Kohn Swift & Graf attorney Jonathan Shub, said he was hopeful the case could move quickly through the system.

That lawsuit also alleged that the policy at issue did not include a virus exclusion.