By Matt Fair

Law360 (April 30, 2020, 7:13 PM EDT) -- A pair of car dealers filed suit in Pennsylvania this week as part of a growing wave of litigation aimed at forcing insurers to provide coverage for business losses during shutdowns caused by the COVID-19 pandemic.

The cases, one filed as a class action in Pittsburgh federal court on Wednesday and the other filed in state court on Tuesday, are part of a rapidly rising tide of litigation against insurers over whether business interruption coverage should be paid out as a result of pandemic-related closures.

The New York-based Geneva Foreign & Sports Inc. claimed in its federal lawsuit that Erie Insurance Co. of New York had wrongfully denied it and similarly situated businesses coverage for loss of income suffered after being forced to shut down as a result of an emergency closure order inked by Gov. Andrew Cuomo last month.

The second suit, filed on behalf of Bowser Automotive Inc. in the Allegheny County Court of Common Pleas, alleged that two Chubb Ltd. units, including Federal Insurance Co., had wrongfully denied its claim for business interruption coverage.

In Geneva's case, the company argued that Erie denied coverage after claiming that the policy applied only to losses caused as a result of civil authorities limiting access to the business as a result of an incident within a 1-mile radius of the insured property.

Geneva argued that the 1-mile limitation had been taken out of its policy, and, moreover, that Erie had ignored policy provisions providing generally that coverage would be available for losses incurred due to governmental action "taken in response to dangerous physical conditions."

"[Erie] waited until after it collected plaintiff's premium and after a pandemic and the resulting closure orders caused catastrophic business losses to plaintiff to attempt to limit its exposure on the back-end through its erroneous assertion that the presence of COVID-19 is not a physical 'loss' or damage and is therefore not a covered cause of loss under its policy," Geneva said.

Meanwhile, it said that other insurers in recent years had actually taken steps to include exclusions specifically meant to cover pandemics.

In the complaint against Chubb in state court, Bowser did not indicate on what grounds the insurers had denied its claim, but said that its "all risk" policy should apply to its closure as a result of emergency orders from Pennsylvania's governor.

"Bowser is entitled to a declaration that the policies of insurance issued by defendants Chubb and Federal provide coverage for the losses, damages and expenses caused by the COVID-19 pandemic," the company said.

Jay Edelson, an attorney with Edelson PC representing Geneva, said he was looking forward to pursuing his suit.

"These are important claims and we are looking forward to litigating them," he said in a statement.

Chubb declined to comment, and representatives for the other parties did not immediately return messages seeking comment on Thursday afternoon.

Geneva is represented by Jay Edelson, Benjamin Richman, Theo Benjamin and Lily Hough of Edelson PC.

Bowser is represented by James Haggerty of Haggerty Goldberg Schleifer & Kupersmith PC, Scott Cooper of Schmidt Kramer PC, John Goodrich of Goodrich & Associates PC, and Jonathan Shub of Kohn Swift & Graf PC.

Counsel information for the defendants was not immediately available.

The cases are Geneva Foreign & Sports Inc. v. Erie Insurance Co. of New York et al., case number 1:20-cv-00093, in the U.S. District Court for the Western District of Pennsylvania, and Bowser Automotive Inc. v. Chubb Group of Insurance Cos. et al., case number GD-20-005272, in the Court of Common Pleas of Allegheny County, Pennsylvania.

--Editing by Aaron Pelc.

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