The Pennsylvania Supreme Court recently rendered its eagerly awaited decision in Ungarean v. CNA, declaring that losses resulting from COVID-related governmental closure orders were not covered by business interruption insurance. In the wake of that decision, the question remains as to whether the war over insurance coverage for COVID-related losses has been lost by policyholders in Pennsylvania or if Ungarean represents only a single battle in a longer, still-undecided war. A careful reading of Ungurean reveals the limited scope of its ruling.

The policyholders alleged that the governmental orders requiring the closure of their businesses in response to the COVID-19 pandemic resulted in a loss of use of their properties and resulting lost income. Each alleged this amounted to "direct physical loss of or damage to" covered property and, therefore, fell within the policies' coverage grant. Crucially, however, as the Supreme Court took pains to point out, the policyholders failed to allege that the coronavirus was actually present at or on their properties, or how the virus may have affected their properties. They instead relied solely on the fact that they were ordered to close.