Bi-Economy Market, Inc. v. Harleysville Ins. Co.

Bi-Economy Market, Inc. (Bi-Economy) (plaintiff) was a retail meat market that purchased an insurance policy from Harleysville Insurance Co. (Harleysville) (defendant). One of the coverages in this policy was business-interruption coverage. Through the business-interruption coverage, the policy promised to pay Bi-Economy for any lost business income during any period in which Bi-Economy could not operate its business, for up to 12 months. This coverage was designed to provide financial support to help Bi-Economy recover from a disaster and eventually continue operating. While the policy was in effect, a fire caused Bi-Economy to shut down its market. Bi-Economy made a claim to Harleysville for the policy’s business-interruption benefits. Initially, Harleysville refused to pay the full claim, paying only approximately $163,000. Over the next year, Harleysville offered to pay for only seven months of lost business income even though the policy provided for 12 months of coverage. More than a year after the fire, an alternative-dispute-resolution body ordered Harleysville to pay Bi-Economy an additional approximately $244,000 in business-interruption benefits. By then, Bi-Economy’s business had completely collapsed. Bi-Economy sued Harleysville. Although Bi-Economy had eventually received its direct contractual benefits under the policy, it argued that Harleysville’s breach delayed the payment of time-sensitive proceeds, which then caused the collapse of Bi-Economy’s business. Bi-Economy sought additional damages for the complete collapse of the business as special or consequential damages for Harleysville’s breach of its policy contract.