The Hartford Financial Services Group and Hartford Fire Insurance Company have been released from the lawsuit detailed on this page after a judge ruled that they were not parties to the plaintiff’s insurance contract.
In a March 12 order, found here, U.S. District Judge Bruce Howe Hendricks noted that the plaintiff’s amended complaint “lumps all Defendants together” without alleging specific misconduct by the Hartford defendants.
“[The plaintiff] cannot demonstrate any injury fairly traceable to the conduct of the [Hartford defendants] because it has no contract with them and has not alleged any other harm attributable to them,” the judge wrote.
According to the order, Twin City, a Hartford subsidiary, issued the plaintiff’s policy “and only Twin City could deny coverage.”
The order went on to state that the Hartford defendants are not subject to personal jurisdiction in South Carolina, where the lawsuit was filed, given neither of them is incorporated there or maintains its principal place of business in the state. Per the order, “a parent company is not subject to personal jurisdiction in a particular forum merely due to its relationship with a subsidiary.”
Accordingly, the Hartford defendants have been dismissed from the case and the plaintiff’s claims will proceed against Twin City alone.
A proposed class action claims The Hartford Financial Services Group, Inc. and Twin City Fire Insurance Company have wrongfully denied claims for COVID-19-related damages even though the policies at issue specifically cover losses stemming from a virus.
Filed by the operator of two Charleston restaurants, the lawsuit out of South Carolina claims the plaintiff and similarly situated policyholders suffered damage when Governor Henry McMaster ordered all food and beverage establishments to close for dine-in service effective March 17. According to the suit, the defendants have “systematically” denied claims for coverage of pandemic-related losses regardless of the specific language in proposed class members’ policies.
“The Defendants simply decided that COVID-19 related business income loss claims would not be covered, notwithstanding the nature of the claim and the specific and unique language of the Policy,” the complaint states.
The plaintiff argues that its “Spectrum Business Owner’s Policy” purported to include business income, extra expense, civil authority, extended business income, and business income from dependent properties coverage. Importantly, the “all risk” policy does not include a form commonly used in the insurance industry to exclude losses stemming from viruses and bacteria, the lawsuit says. Rather, the plaintiff’s policy expressly includes coverage for virus-related losses in a “Limited Fungi, Bacteria, or Virus Coverage” form that covers “direct physical loss or direct physical damage to Covered Property caused by . . . virus,” according to the case.
The plaintiff says that after the restaurant “promptly and properly” submitted a claim for business income losses caused by the governor’s shut-down orders, the eatery received a form denial letter that the suit alleges was simply a “preordained formality” that the insurers decided to send before even reviewing the claim.
According to the suit, the plaintiff’s counsel responded to the denial letter, after which the defendants sent a second denial letter asserting that “there is no coverage under the Policy because the claim does not allege a ‘direct physical loss.’”
The plaintiff disagrees with the insurers’ assessment, arguing that “direct physical loss” is undefined in the policy and must therefore be “liberally construed in favor of coverage.” Contrary to the defendants’ argument, the damage suffered by the plaintiff and similarly situated businesses falls under a “specified cause of loss,” as stated in the policy, the suit says.
The plaintiff stresses that the claims in its lawsuit differ fromprevious litigationin which the policies at issue did not expressly include virus-related damages.
The lawsuit looks to cover those who entered into an insurance contract with the defendants that provides business income and extra expense coverage and contains Form SS-40-93-07-05 (“Limited Fungi, Bacteria, or Virus Coverage”) and who suffered loss due to government orders issued in response to the COVID-19 crisis.
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.