October 1, 2025 | Philadelphia, PA — MedLegalNews.com — A Pennsylvania federal judge has ruled that Continental Casualty Co. is not required to defend or indemnify a local laboratory in a lawsuit brought by a COVID-19 test manufacturer. The manufacturer alleged the lab failed to perform contracted testing services and misrepresented its quality controls, but the court found the claims fell outside the scope of the lab’s commercial general liability policy.
Judge [Name Redacted in Court Order] concluded that the complaint asserted breach-of-contract and negligent misrepresentation, not bodily injury or property damage, which are the key triggers for coverage. Without an “occurrence” as defined in the policy, the insurer successfully argued it owed no duty to defend the lab in the underlying action.
Contractual Liability Exclusion Proved Critical
The decision hinged on the policy’s contractual liability exclusion, which bars coverage for obligations arising from a contract unless the liability would exist without the contract. The court agreed that every claim against the lab flowed from the COVID-19 testing agreement, leaving no independent tort to support coverage.
COVID-19 Testing Contracts Under Legal Microscope
COVID-19 testing contracts have produced a wave of disputes nationwide as manufacturers and laboratories clash over capacity, accuracy, and turnaround times. This case underscores how policy language—especially exclusions—can sharply limit pandemic-related coverage even when operations directly involve healthcare services.
Implications for Labs and Insurers
Legal analysts note that this ruling reinforces insurers’ ability to rely on standard exclusions in the face of COVID-19 lawsuits, particularly those involving testing contracts and related disputes. Laboratories and other healthcare providers may need to review professional liability and errors-and-omissions coverage to avoid similar gaps.
For more detailed information on the court’s analysis and the policy exclusions involved, visit the comprehensive case summary provided by the National Association of Insurance Commissioners (NAIC) here.
Stay informed with breaking appellate and insurance-law updates — subscribe to MedLegalNews.com today.
🔗 Read More from MedLegalNews.com:
- Arbitration Win in Louisiana Nursing Home Hurricane Coverage Case
- Fifth Circuit Questions Policy Count in Louisiana Hurricane Arbitration Fight
- California Unconscious Bias Training Supreme Court Appeal
- California Medi-Cal Cuts for Undocumented Immigrants in Budget Deal
- California Medicaid Funding Gap Addressed With $2.8B Plan
FAQS: About the Pennsylvania Insurer Ruling
Why did the court rule against coverage?
The judge found that the allegations involved breach of contract and misrepresentation, not bodily injury or property damage, which are required to trigger the commercial liability policy.
Does this decision affect all COVID-19 testing contracts?
No. It is specific to the policy language and facts of this case, but it highlights how insurers may avoid coverage when claims stem solely from contractual duties.
What steps can labs take to avoid similar coverage disputes?
Labs can work with insurance brokers to secure professional liability or errors-and-omissions policies that clearly cover claims for negligent performance of testing services.
Can the lab appeal the ruling?
Yes. The laboratory may appeal to the U.S. Court of Appeals for the Third Circuit, though success would depend on demonstrating ambiguity in the policy terms or an error in legal interpretation.