A federal judge is allowing a business interruption insurance claim to proceed to trial, ruling that companies experiencing a slowdown and not a full closure could potentially still expect business-interruption coverage to apply due to COVID-19, and
At a hearing set for Nov. 16, plaintiffs will argue that the lawsuit should convert to a class action.
“As relevant case law in the COVID-19 context continues to develop, subsequent decisions construing similar insurance provisions under similar facts may be persuasive,” wrote U.S. District Judge Stephen R. Bough in a Sept. 21 opinion. “If warranted, Owners may reassert its arguments at the summary judgment stage.”
Blue Springs Dental Care, Green Hills Dental, Highland Dental Clinic, and Kearney Dental sued Owners Insurance for breach of contract and extra expense on May 13 in the Western District of Missouri.
Attorney Patrick J. Stueve, representing the dentists, argues that his clients are not unique.
“The insurance industry appears to be taking a uniform approach to the current pandemic: deny coverage even when the policy they drafted and offered to insureds, and the policy paid for by the insureds, does not contain an exclusion for pandemic-related losses,” Stueve wrote.
The dentist’s Owners Insurance policy did not have virus exclusions, according to the opening brief.
"[The policies] exemplify the broken promise from insurance companies across the country,” Stueve wrote. “This is a class action in which at least one member of the class is a citizen of a state different from Defendant, the amount in controversy exceeds $5 million exclusive of interest and costs, and the proposed class contains more than 100 members.”
“COVID-19 and the resulting response by state and local governments have caused the physical loss of Plaintiffs’ property and have interrupted Plaintiffs’ businesses. Yet, Defendant has refused to honor its promise to provide the protection that Plaintiffs purchased.”
Media reports estimate there are 187,006 coronavirus cases statewide and 3,002 deaths as of Oct. 30.
Jefferson City attorney and civil justice reform advocate Rich AuBuchon said many of the business interruption suits in Missouri are testing the bounds of individual policy language.
“This issue may not resolve quickly but hopefully the courts will resolve this issue properly by focusing on the language of each policy that was signed," AuBuchon told the St. Louis Record. "Until these coverage issues are resolved they will remain as a dark cloud over the bright economic recovery of our great state of Missouri from this pandemic.”
"Plaintiff lawyers are quick to capitalize on this issue and are encouraging litigation by investing in a national advertising campaign to obtain business clients against the insurance industry."