Century-National Insurance Company is on the receiving end of a proposed class action in which the operators of several California taco shops allege the insurer wrongfully denied their claim for COVID-19-related business interruption coverage.
The plaintiffs say they purchased a commercial property insurance policy from Century-National that included business income, extra expense, civil authority, and sue and labor coverage. Under the all-risk policy, Century-National agreed to pay for all covered losses that were not specifically excluded, and the policy purportedly contained no exclusions for losses caused by virus, the case claims.
The plaintiffs say they were forced to “severely limit” their operations after a series of state and local executive orders were issued in March in an effort to slow the COVID-19 outbreak. Although the San Diego and Carlsbad taco shops were considered “essential critical infrastructure” under California Governor Gavin Newsom’s orders, the restrictions prohibiting on-site dining caused “a disastrous evaporation” of the plaintiffs’ business income, the lawsuit states.
According to the suit, the presence of COVID-19 caused “direct physical loss or damage” to the plaintiffs’ covered properties given the taco shops could not be used for their intended purposes. Despite suffering covered losses, the plaintiffs’ claim was denied by Century-National as part of the insurer’s “widescale” refusal to pay policyholders’ COVID-19-related business interruption claims, the suit says.
The 28-page lawsuit out of California comes amid a growingtrend of litigation filed against commercial property insurers over their apparent refusal to pay claims for damage caused by the pandemic and related closures.
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.