Admiral Indemnity Company No Payout for Covid-19 Losses Class Action

Many businesses that have suffered losses from closings required to prevent the spread of the Covid-19 pandemic. Some of them are turning to their business insurance companies seeking payouts for business income losses. The complaint for this class action brings suit against Admiral Indemnity Company, saying, “This action seeks a declaratory judgment that affirms that the Covid-19 pandemic and the corresponding response by civil authorities to stop the spread of the outbreak triggers coverage, has caused physical property loss and damage to the insured property, provides coverage for future civil authority orders that result in future suspensions or curtailments of business operations, and finds that [Admiral] is liable for the losses suffered by policyholders.”

The Nationwide Class for this action is all entities who have standard all-risk commercial property insurance policies with Admiral, where such policies provide for business income loss and extra expense coverage and do not exclude coverage for pandemics, and who have suffered losses due to measures put in place by civil authorities’ stay-at-home or shelter-in-place orders since March 15, 2020. A New York Subclass has also been defined.

The plaintiff in this action is Michael Cetta, Inc., a restaurant in New York, New York, which does business as Sparks Steak House. Sparks had an “all risk” insurance policy with Admiral. The policy includes coverage for Business Income (and Extra Expense)” as well as Civil Authority.

It does have an Exclusion of Loss Due to Virus or Bacteria, which the complaint quotes as saying, “We will not pay for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease.”

However, the complaint alleges that this exclusion does not apply, because the “losses were not caused by a ‘virus, bacterium or other microorganism…’ Rather, the efficient proximate cause of [the] losses[] were the Closure Orders, not because the coronavirus was found in or on [the restaurant’s] insured property.”

The complaint alleges, “Admiral does not intend to cover losses caused by the Closure Orders as part of business interruption coverage. As aforementioned, Admiral denied [Sparks’s] claim, even though [Sparks] was forced to close due to the closure orders.”

As another indication that Admiral should be making the insurance payouts, the complaint notes that the Small Business Administration requires “that ‘reimbursement’ from ‘business interruption insurance’ be submitted along with an application for an Economic Injury Disaster loan” and “America’s SBDC [Small Business Development Center], whose Covid-19 newsletter expressly states, ‘Business interruption insurance also applies if government actions cause operations to cease temporarily, which results in a loss for a firm.’”

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Admiral Indemnity Company No Payout for Covid-19 Losses Complaint

June 16, 2020

Many businesses that have suffered losses from closings required to prevent the spread of the Covid-19 pandemic. Some of them are turning to their business insurance companies seeking payouts for business income losses. The complaint for this class action brings suit against Admiral Indemnity Company, saying, “This action seeks a declaratory judgment that affirms that the Covid-19 pandemic and the corresponding response by civil authorities to stop the spread of the outbreak triggers coverage, has caused physical property loss and damage to the insured property, provides coverage for future civil authority orders that result in future suspensions or curtailments of business operations, and finds that [Admiral] is liable for the losses suffered by policyholders.”

Admiral Indemnity Company No Payout for Covid-19 Losses Complaint

Case Event History

Admiral Indemnity Company No Payout for Covid-19 Losses Complaint

June 16, 2020

Many businesses that have suffered losses from closings required to prevent the spread of the Covid-19 pandemic. Some of them are turning to their business insurance companies seeking payouts for business income losses. The complaint for this class action brings suit against Admiral Indemnity Company, saying, “This action seeks a declaratory judgment that affirms that the Covid-19 pandemic and the corresponding response by civil authorities to stop the spread of the outbreak triggers coverage, has caused physical property loss and damage to the insured property, provides coverage for future civil authority orders that result in future suspensions or curtailments of business operations, and finds that [Admiral] is liable for the losses suffered by policyholders.”

Admiral Indemnity Company No Payout for Covid-19 Losses Complaint
Tags: Business Insurance, Covid-19 Related, Denial of Benefits, Insurance