Pennsylvania state court was inundated with individual claims and proposed class-action lawsuits from four restaurants and a dental practice in the state seeking coverages from their insurance companies for losses caused by temporary closures required by the state to stop the spread of COVID-19, according to Law360.
Pittsburg restaurants Umami and Round Corner Cantina filed individual lawsuits against Motorists Commercial Mutual Insurance Co. Cobra Lounge filed a proposed class action against Motorists seeking to represent a class of businesses who were also denied COVID-19-related business interruption coverage by Motorists. The Rochester Inn & Hardwood Grill filed a proposed class action against Nautilus Insurance Company, and Smile Savers Dentistry filed a proposed class action against CNA Insurance.
On March 19, Pennsylvania Gov. Tom Wolf ordered all nonessential businesses to close in order to stop the spread of COVID-19. Afterward, the businesses filed claims with their insurers against their business interruption insurance, part of a business owner’s policy that provides coverage for payroll and other operating expenses in the event the business must temporarily close due to a disaster. This generally involves damages caused by tornadoes or hurricanes.
The restaurants and dentist office sought business interruption coverage for losses they suffered during the government-mandated shutdown, but they were denied. Their insurers claimed that pandemics are not acceptable disasters as far as their policies are concerned.
“The COVID-19 virus, as evidenced by these orders, causes damage to property, particularly in places of business … where the operation of the business requires interaction, gatherings and contact in areas where there exists a heightened risk of contamination by the COVID-19 virus,” all the complaints said.
Beasley Allen is actively pursuing cases with clients whose insurance companies denied their business interruption claims. Dee Miles, Head of our Consumer Fraud Section, Rachel Boyd and Paul Evans are spearheading this litigation for our firm. They would like to talk to you about any potential claims.