Lawsuits Filed Against Insurance Companies over Denied Claims for COVID-19 Losses

As coronavirus-related insurance claims continue to rise, denials of those claims continue to rise right along with them.  Over the past month, these denials have spawned litigation over whether business interruption coverage, a common part of many commercial insurance policies, can cover losses due to mandatory shutdowns resulting from the COVID-19 outbreak.

Recently, we detailed one case of a Chicago River West restaurant, Maillard Tavern, whose owners filed a lawsuit. They are seeking a declaratory judgment against their insurance company, Society Insurance, after the insurer denied the restaurant’s claim for financial losses sustained in the wake of statewide closures of bars and restaurants. 

Why are insurance companies denying business interruption loss claims?

According to insurance companies, business interruption coverage simply does not apply to losses sustained due to closures that were taken as precautionary measures to prevent the spread of the outbreak.  Insurance companies argue that because the outbreak has not caused physical damage to the property, most coronavirus-related business interruption claims are not covered. 

Here are the business interruption lawsuits filed across the U.S.

As a result, a host of lawsuits have been filed seeking to find valid coverage for losses related to closures due to coronavirus, including:

• March 20, 2020:  Suit filed in Louisiana District Court by Oceana Grill in New Orleans against Lloyd’s Underwriters;

• March 24, 2020: Suit filed in Oklahoma state court by the Chickasaw Nation and the Choctaw nation against Lexington Insurance Company and various affiliates of Lloyd’s;

• March 25, 2020: Suit filed in Harris County, Texas District Court by the owner of a wig shop against Twin Cities Fire Insurance Company;

• March 25, 2020: Suit filed in a Napa County, California court by a restaurant owner against Hartford Fire Insurance Company and Trumball Insurance Company;

• March 31, 2020: Suit filed in Northern District of Illinois by the Billy Goat Tavern against Society Insurance;

• April 1, 2020: Suit filed in Northern District of Illinois by Big Onion Tavern Group LLC, Machine 1846 LLC, New 400 LLC, Harper Theatre LLC, Welcome Back LLC, Legacy Hospitality LLC, McBride’s Aurora Inc., McBride’s Pub Inc., McBride’s on 52 Inc., HomeSlyce Is Where the Heart Is LLC, 3458 Norclark Restaurant LLC, Happy Camper Pizzeria LLC, and 1913 Northco LLC against Society Insurance. 

• April 2, 2020: Suit filed in Florida federal court by Prime Time Sports Bar against Lloyd’s Underwriters;

• April 3, 2020:  Suit filed by Houston dine-in theater company, Star Cinema against Lloyd’s of London. (insured reportedly paid $40K in premiums for $1M in coverage)

• April 6, 2020: Class action lawsuit filed in Canadian Court against a group of 10+ insurers, including Lloyd’s Underwriters

• April 6, 2020: Suit filed by South Florida dive shop, Conch Republic Divers against Tokio Marine Specialty Insurance Co.

• April 8, 2020: Suit filed by the owner of 7 San Antonio area barbershops against State Farm, claiming losses of over $1 million.

• April 17, 2020: Suit filed by group of restaurant owners against group of insurers including Lloyd’s of London and Topa Insurance;

• April 20, 2020: 2 groups of plaintiffs made requests for consolidation to Judicial Panel on Multidistrict Litigation;

Questions? Contact us today.

If you have a question about insurance coverage or believe you have been treated unfairly by your insurance company, you should contact the attorneys at Shannon Law Group at (312) 578-9501.