A major Miami-Dade County theater has filed a proposed class action lawsuit against the global reinsurance company SCOR SE alleging it wrongfully denied claims for business interruption losses incurred when it was forced to shut down during the coronavirus pandemic.
Actors Playhouse Inc., which runs the acclaimed Miracle Theatre in Coral Gables, Florida, holds a property insurance policy that includes coverage for losses stemming from business interruption, the lawsuit claims, according to Law 360.
Additionally, the theater’s policy includes coverage for extra expenses it racks up due to a suspension of business, as well as a civil authority provision to pay for lost income specifically caused by shutdowns ordered by civil authorities. Like many businesses deemed “non-essential” in the coronavirus crisis, the Miracle Theatre was forced to suspend its activities since March when the pandemic was nascent.
“Plaintiff’s policy does not contain any exclusion which would apply to allow defendants to completely deny coverage for losses caused by COVID-19 and related actions of civil authorities taken in response to COVID-19,” the theater’s lawsuit asserts, according to Law 360. “Accordingly, because the policy is an all-risk policy and does not specifically exclude the losses that plaintiff has suffered, those losses are covered.”
The lawsuit also points out that a company called Insurance Services Office, which develops standard policy language for the insurance industry, drafted a virus exclusion in 2006 after the SARS epidemic, but SCOR chose not to include that language in Miracle Theatre’s contract, even though the contract includes other language written by Insurance Services Office.
A lawyer representing the playhouse told Law360 that because of the COVID-19 pandemic and all the uncertainty it creates for business, many businesses and non-profits are “unable to meet their financial obligations, which is precisely why they carry business interruption insurance.”
“The global pandemic is destroying businesses, and the economy will not be able to recover unless insurers take responsibility for their contractual obligations and provide the coverages that businesses have been paying a premium for,” the theater’s lawyer told Law360.
The lawsuit names as defendants Paris, France-based SCOR and its subsidiary, General Security Indemnity Co. of Arizona. The complaint seeks to represent a nationwide class of businesses whose coronavirus-related business interruption claims have been rejected by SCOR.
Denial of business interruption claims
Beasley Allen lawyers are actively investigating and filing claims against various insurance companies for denial of business interruption coverage during the COVID-19 pandemic, and are involved in advocating for consolidation of these actions in an MDL. Dee Miles, head of our Consumer Fraud & Commercial Litigation Section, Rachel Boyd, and Paul Evans, lawyers in the Section, are spearheading this litigation for our firm and are monitoring all MDL developments as they arise.