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Law360 (May 28, 2020, 5:14 PM EDT ) Philadelphia-based business and commercial law firm Spector Gadon Rosen Vinci PC has filed suit against its insurance company in Pennsylvania state court, saying the company wrongly refused to approve a claim the firm filed after its offices were closed due to the COVID-19 pandemic.
Spector Gadon says in a suit filed Tuesday that the firm's policy with Valley Forge Insurance Co. covered business losses connected to an office closure ordered by a civil authority, and that the stay-at-home order in Pennsylvania met the criteria in the agreement.
Despite this, the firm says, Valley Forge denied the firm's claim.
"SGRV, like most American businesses, has suffered significant losses on account of the pandemic and the resultant closures and government stay-at-home orders," the complaint said. "Although SGRV has complied with all provisions of the subject insurance policy, and although application of the standard rules of insurance contract interpretation makes clear that coverage exists for SGRV under the instant circumstances, Valley Forge refuses to reimburse SGRV."
According to the complaint, Spector Gadon's policy with Valley Forge covers "loss of business income" that occurs during a "period of restoration" after it was required to suspend operations. The policy also explicitly outlines that such a suspension can be the result of actions of civil authorities in response to "direct physical loss of or damage" within five miles of the firm, the complaint says.
The COVID-19 pandemic and the resulting orders to protect public health by closing businesses in the state fit this definition, Spector Gadon argues.
"The pandemic has caused SGRV a loss of use of its property, which triggers coverage under the policy," it said.
However, when the firm submitted its claim after being forced to shut down its office in March, Valley Forge decided to deny coverage, the suit says.
Counsel for Spector Gadon did not respond Thursday to a request for comment. Representatives for Valley Forge could not be reached for comment Thursday.
Spector Gadon is represented by its own Daniel Dugan and Neal R. Troum.
Counsel information for Valley Forge was not available Thursday.
The case is Spector Gadon Rosen Vinci PC v. Valley Forge Insurance Co., case number 200501636, in the Philadelphia Court of Common Pleas.
--Editing by Abbie Sarfo.
For a reprint of this article, please contact reprints@law360.com.
