Texas Distillery Owner Says Insurer Denied COVID-19 Claim in Bad Faith

FORT WORTH, Texas — The owner of a Texas distillery and tasting room has sued Philadelphia Insurance Co., demanding coverage for business interruption losses it sustained during the COVID-19 outbreak.

In a complaint removed to the U.S. District Court for the Northern District of Texas on June 19, M Distillery Inc. accuses the insurer of mishandling its claim, making material misrepresentations about policy provisions, and wrongly denying coverage.

Philadelphia Insurance denied M Distillery’s claim on the alleged basis that the distillery did not suffer a “direct physical loss.” That term is not defined in the policy, is vague and ambiguous, …