A reinsurer is trying to convince a Florida federal court to toss a theater’s proposed class action lawsuit accusing the insurance company of breaching its contract by not covering the theater’s COVID-19-related damages. In its argument, the reinsurer proceeded to split hairs by telling the court the theater didn’t present any proof of physical damages, Law360 reports.
The reinsurer, SCOR SE, also said that the policy that Actors Playhouse Productions Inc., which operated the Miracle Theatre in Coral Gables, Florida, held excluded closures due to microorganisms, pollutants, and biological causes. The theater was one of a record number of Florida businesses that have filed lawsuits demanding insurers honor their business interruption insurance policies.
The theater filed a claim on its business interruption insurance following state-mandated closures to stop the spread of COVID-19. When the claim was denied, the theater and its parent company sued SCOR SE and its subsidiary General Security Indemnity Co. of Arizona. The theater argued that being unable to operate due to events out of its control constituted physical damages.
Business interruption insurance is part of a business owner’s policy. It provides coverage for operating expenses in the event a business has to temporarily close due to a disaster, such as a fire. The Miracle Theatre, like many businesses across the country, have had their COVID-19-related business interruption claims denied. Insurers claim closures due to the pandemic are not covered because the businesses did not suffer physical damage.
Some businesses say that the mere presence of the virus on their tables, chairs, and other objects within the establishments — even if not visible to the naked eye — constitutes damages because it renders the property unsafe for customers. SCOR SE disagrees saying that if the property can be cleaned and disinfected effectively, it poses no risk to consumers.
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 multidistrict litigation (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. Please contact them if you have any questions or would like to discuss potential claims.