May 11, 2020 – Cincinnati Insurance Company Hit with Another COVID-19 Business Interruption Case
A Birmingham, Alabama seafood restaurant is at least the second small business to file a proposed class action against the Cincinnati Insurance Company over its allegedly wrongful denial of damage claims stemming from the COVID-19 crisis.
The James Beard Award finalist says it was forced to suspend business in March 2020 as the result of Birmingham and Jefferson County orders preventing access to and occupancy of the eatery amid the coronavirus pandemic. Though the plaintiff held a general liability policy with the defendant, Cincinnati Insurance Co. neglected to hold up its end of the bargain in that it’s failed to pay claims for covered losses and expenses related to COVID-19-induced business closures, the lawsuit alleges.
“These losses and expenses are not excluded from coverage under the Policy,” the complaint reads. “And because the Policy is an all-risk policy, and Plaintiff has complied with its contractual obligations, Plaintiff is entitled to payment for these losses and expenses.”
Despite Alabama reopening portions of the state’s economy as of April 28, restaurants in the state are to remain closed until a later date, the suit says.
A Philadelphia music venue and bar alleges in a proposed class action that the Cincinnati Insurance Company and a number of affiliated entities have wrongfully denied claims for losses stemming from government orders to suspend business operations due to the COVID-19 crisis.
The lawsuit says the all-risk policy purchased by the plaintiff from Cincinnati Insurance Co. and co-defendants the Cincinnati Casualty Company, the Cincinnati Indemnity Company and Cincinnati Financial Corporation contained coverage for business income, extended business income and extra expense. The coverages, the case says, provided for the payment of the actual loss of business income incurred by the plaintiff “during a period of restoration,” and, under the policy’s civil authority provision, payment of business income and extra expenses “due to an action of a civil authority” that prohibited access to the property.
According to the complaint, none of the provisions in the plaintiff’s Cincinnati all-risk insurance policy contained explicit exclusions for losses caused by a virus or governmental orders issued to prevent exposure to a virus.
After the plaintiff was forced to suspend business due to a Pennsylvania mandate, the company filed a claim with Cincinnati that the lawsuit alleges was wrongfully denied. Upon information and belief, the breach of contract case says, Cincinnati Insurance Co. has, on a “wide-scale and uniform basis,” refused to pay insureds for losses incurred as the result of executive orders issued by civil authorities pertaining to the suspension of business operations.
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.