1. Mace Marine Inc., dba Conch Republic Divers, filed a lawsuit against Tokio Marine Specialty Insurance Co. for denying its business interruption claim due to the coronavirus pandemic.
2. The dive shop claims that the denial was improper, in bad faith, and a breach of contract, resulting in financial harm.
3. The shop had a commercial lines policy that covered business income, extra expense, ingress/egress, and civil authority, and it ceased operations by order of the State of Florida and Monroe County in March.
4. The denial was claimed to be improper because the policy contains coverage for acts of civil authority, which prevented the shop from operating, and the CDC and WHO recommended routine cleaning and disinfection of surfaces due to the virus. 1. The suit alleges that property touched by a person infected with COVID-19 is presumed to be contaminated.
2. The property owner was temporarily unable to use its property due to potential contamination until it was sanitized.
3. The insured will incur extra expenses for cleaning and sanitizing its equipment and property, which is covered under the policy for business income losses and extra expenses.
4. The insurer’s denial of coverage breached the policy and constituted bad faith.
5. The policy contains coverage for acts of civil authority, which precluded the dive shop from operating its business.
6. The plaintiff demands a jury trial and calls for a declaratory judgement affirming that a pandemic is a covered cause of loss not subject to any exclusion under the policy. 1. The attorney for Conch Republic Divers, Matt Landau, stated that the insurance policy does not have a pandemic exclusion and makes limited reference to virus, which he believes does not apply to the current situation.
2. Landau announced that the firm will be filing additional lawsuits related to business interruption coverage throughout Florida in the coming days, joining at least two other suits already filed in the state.
3. A spokesperson for Tokio Marine Group declined to comment on the case at this time.
4. The insurance industry is facing multiple lawsuits from businesses over business interruption coverage denials, and has been under increasing pressure to investigate and cover these claims from President Donald Trump, insurance regulators, and lawmakers.
5. The industry has stated that being asked to rewrite the terms of insurance contracts is unconstitutional and doing so would bankrupt the industry.
6. According to insurance defense attorney Jeffrey Wank, the availability of coverage for businesses due to losses from the pandemic will depend on the specific language of the policy, which is typically interpreted very broadly by Florida courts. 1. Insurance companies look for physical damage to property when evaluating business interruption claims.
2. COVID-19 has sparked debate in the insurance industry over whether it causes physical damage to property.
3. Many insurance policies exclude coverage for viruses, pandemics, and bacteria.
4. Businesses argue that COVID-19 closures have led to actual physical damage and should be covered.
5. The ultimate decision on coverage will be up to the courts.
6. If courts find that COVID-19 causes physical damage, coverage for losses may be provided, subject to any exclusions.
https://www.insurancejournal.com/news/southeast/2020/04/22/565719.htm
Leave a Reply