A Portland restaurant claims in a proposed class action that Berkley North Pacific Group, its subsidiaries, and Continental Western Insurance Company have unlawfully denied policyholders’ claims for damage caused by the COVID-19 pandemic.
The plaintiff says its all-risk insurance policy purported to include business income and civil authority coverage that were triggered when the fine dining restaurant was forced to close in mid-March as a result of the ongoing pandemic and related government orders. Despite suffering “substantial” lost business income and other financial damages, the plaintiff’s insurance claim was denied by the defendants, the case says.
“These extraordinary losses of business income (and concern for its employees’ welfare) are precisely why [the plaintiff] took out insurance with Defendants that included business interruption coverage, which was meant to cover these losses,” the complaint states.
Per the case, the plaintiff’s policy indicates that it covers “all risks” that can cause harm to physical property except for those that are expressly excluded. According to the suit, the defendants chose not to include in their policy an endorsement frequently used in the insurance industry that excludes losses caused by “any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.” Berkley has since sent a letter to the plaintiff in which it noted that the virus endorsement will be included in the plaintiff’s policy upon renewal, the case says.
The lawsuit claims Oregon Governor Kate Brown’s mandate that all citizens “stay home, save lives” prohibited customers and employees from accessing the plaintiff’s property, which thereby caused its physical components to become “unusable, damaged” and unable to generate business income. Although the plaintiff’s insurance policy purported to cover such losses, the defendants denied the restaurant’s claim, the suit says.
The plaintiff argues that the speed with which its claim was denied indicates that the defendants’ decision was based not on “a good faith or reasonable investigation” but a “deliberate strategy and common policy” to categorically deny all claims submitted by businesses forced to close amid the coronavirus pandemic. According to the case, the defendants shared a goal with the insurance industry to minimize claim payments “by any means necessary.” From the complaint:
“Defendants’ categorical treatment, failure to investigate in good faith, and denial of [the plaintiff’s] and the Class members’ claims appears to be part of a broader strategy being employed by the insurance industry generally, to broadly deny claims for business interruption coverage related to the Coronavirus pandemic, as has been widely reported by the media and resulted in numerous lawsuits brought by businesses against property insurance companies throughout the country.”
ClassAction.org’s coverage of COVID-19 litigation can be found here and over on our Newswire.