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Developments in Business Interruption Insurance Litigation Claims Brought Throughout Florida & Country

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We previously mentioned that the current pandemic was expected to bring a significant amount of insurance litigation over business interruption policies, even though most policies explicitly exclude coverage for pandemics and viruses. As of early May, a number of COVID-19 business interruption insurance lawsuits have already been filed. In addition, a number of legislative efforts to redefine coverage for those businesses impacted by the virus have been made, although this does not include Florida as of yet.

There is no question that the impact of the virus on businesses has been severe, with close to 80 percent expecting losses to be over $1 million and almost 40 percent expecting them to be more than $25 million–more than could possibly be covered by insurance companies and policies. Plaintiffs in lawsuits brought thus far include healthcare companies, nonprofit organizations, restaurants, service industry businesses, and more–in both class action and individual lawsuits—alleging breach of contract, bad faith, covenant of good faith and fair dealing, and unfair business practices claims, and seeking not only compensation for losses, but also punitive damages, in some cases; arguing that financial harm and injuries were suffered as a result of having their claims denied.

Florida Litigation Against Chubb Ltd.

That includes Florida, where a class action lawsuit was filed by a number of restaurants against Chubb Ltd. In federal court, arguing that their coverage is triggered by government-mandated shutdowns, which should fall under provisions that cover direct physical loss in the policy. Plaintiffs are arguing that insurers should have included explicit definitions for “physical loss or damage” if they intended to exclude loss of use of property that has not itself technically been physically altered and this type of coverage.

This is an important case, as the insurance policy contains coverage for “acts of civil authority,” which plaintiffs now claim includes local shutdowns of non-essential businesses. Plaintiffs also claim that the dangers of contamination linked to COVID-19 renders property unusable and non-functioning, similar to property that has suffered actual structural damage.

Litigation To Watch: “Pandemic Event Endorsement” Policy

One case in particular that will also be important to watch concerns a challenge involving a policy that explicitly provides coverage for losses linked to 25 different diseases, including SARS, which is caused by one type of coronavirus. However, the insurer has denied coverage under the justification that COVID-19 is not specifically covered under the policy. The plaintiff is arguing that COVID-19 is a variation of the virus that causes SARS, and thus implicitly covered by the policy.

Contact Our Florida Insurance Defense Attorneys Today

HD Law Partners has decades of experience representing insurers who are sued over insurance coverage disputes and bad faith claims. If you are being sued over COVID-19, our Tampa insurance litigation attorneys can help you fashion the perfect litigation strategy. Contact us today to find out more about our services.

 

Resource:

law360.com/articles/1260634/theater-owner-seeks-1m-payout-under-pandemic-clause

businessinsurance.com/article/20200421/NEWS06/912334156/Chubb-faces-COVID-19-business-interruption-suits-coronavirus-Truhaven-Enterprise

https://www.hdlawpartners.com/breach-of-contract-claims-for-commercial-landlords-businesses-during-covid-19-will-force-majeure-be-of-help/

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