Aspen American Insurance No Payout for Covid-19 Business Losses Class Action

Many small businesses have had to partly or completely shutter due to efforts to combat the spread of Covid-19. They have therefore lost considerable income, and some of them are looking to their insurance policies to try to recoup it. The complaint for this class action alleges Aspen American Insurance Company is refusing to pay for business losses incurred during the Covid-19 pandemic.

The complaint makes startling claims about insurance industry financials: “According to information published by the Insurance Information Institute, the U.S. insurance industry collected net premiums of $1.22 trillion in 2018. Premiums recorded by property/casualty insurers accounted for 51% of that amount. Between 2014 and 2018, these insurers wrote net premiums each year of between $497 billion and $612.6 billion but only incurred losses of between $277.7 billion and $360.9 billion.”

Plaintiff Patrick B. Lillis, DDS, has a dental practice called Overland Park Dental Design, LLC, in Overland Park, Kansas. He has an all-risk commercial property insurance policy with Aspen. The complaint alleges that Aspen is one of a growing number of insurance companies that are refusing to pay for business income losses due to the measures taken to slow the spread of Covid-19.

Both Kansas and Johnson County, where the dental practice is located, issued stay-at-home orders. These orders caused the suspension of businesses.

Ingress and egress to the dental office have been limited. Covid-19 can last for hours or even days in the air and on surfaces. Since the virus seems to have been circulating in the US for longer than originally assumed, the complaint says, “[i]t is likely customers, employees, and/or other visitors to the insured property were infected with the coronavirus and thereby caused physical loss and damage to the property.”

It adds, “In addition, the spread of Covid-19 has made the insured premises unsuitable for its intended use.”

The insurance policy covering the property did not have any exclusions for pandemics. Nevertheless, Aspen has refused to make a payout. The complaint claims that Aspen in breach of its obligations by refusing to provide coverage despite having sufficient information to evaluate and pay the claim.”

Two classes and a subclass have been defined for the action.

  • The Nationwide Declaratory Judgment and Injunctive Class is all businesses subject to a stay-at-home order that are covered by one of Aspen’s policies which contains Practice Income, Civil Authority, Extra Expense, Expenses to Reduce Damage, and/or Sue and Labor coverage on terms similar to the policy of the plaintiff in this case, which policies were in effect during the Covid-19 pandemic.
  • The Nationwide Breach Class is all policyholders of Aspen who made a claim and were denied coverage under one of Aspen’s policies due to Covid-19.
  • The Kansas Subclass is all those who bought one of Aspen’s policies in Kansas and were denied coverage due to Covid-19.
Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Aspen American Insurance No Payout for Covid-19 Business Losses Complaint

July 29, 2020

Many small businesses have had to partly or completely shutter due to efforts to combat the spread of Covid-19. They have therefore lost considerable income, and some of them are looking to their insurance policies to try to recoup it. The complaint for this class action alleges Aspen American Insurance Company is refusing to pay for business losses incurred during the Covid-19 pandemic.

Aspen American Insurance No Payout for Covid-19 Business Losses Complaint

Case Event History

Aspen American Insurance No Payout for Covid-19 Business Losses Complaint

July 29, 2020

Many small businesses have had to partly or completely shutter due to efforts to combat the spread of Covid-19. They have therefore lost considerable income, and some of them are looking to their insurance policies to try to recoup it. The complaint for this class action alleges Aspen American Insurance Company is refusing to pay for business losses incurred during the Covid-19 pandemic.

Aspen American Insurance No Payout for Covid-19 Business Losses Complaint
Tags: Business Insurance, Denial of Benefits, Insurance