Hartford FSG, Sentinel No Payout for Covid-19 Losses Class Action

Many businesses have lost income during the Covid-19 pandemic, due to state orders for businesses to shut down or consumers to stay at home. Now these businesses are making claims on their insurance policies, and many insurers are refusing to pay benefits. In this case, the insurance companies are Sentinel Insurance Company and its parent, the Hartford Financial Services Group, Inc.

The class for this action is all persons and entities who have standard commercial property insurance policies with a Hartford carrier, insuring a property in the US, which provides for business income loss and extra expense coverage and does not exclude coverage for pandemics, and who have suffered losses due to measures required under a Covid-19 civil authority order. There is also a California Subclass.

Businesses have made their claims under a number of coverages: business income coverage, extra expense coverage, and civil authority coverage.

Both plaintiffs in this case—Good Times Barbershop and Ravive Health and Vitality, LLC—operate in California. Both were required to close on March 19, 2020 because of the governor’s order that required “all individuals living in the State of California to stay home or at their place of residence except as needed” for essential services.

Both plaintiff businesses have all-risk policies that purport to cover their insureds for all risks other than those expressly excluded. The complaint alleges that the interruptions of the businesses were not caused by any of these exclusions.

The policies do contain Limited Fungi, Bacteria or Virus Coverage provision. This excludes remediation measures for “rot, bacteria, or virus infestation at the insured property, but covers such an infestation if it is caused by an otherwise covered peril.” In addition, the complaint alleges that this provision does not exclude the plaintiffs’ losses “because the efficient proximate cause of losses was precautionary measures taken by [the] state to prevent the spread of Covid-19 in the future, not because coronavirus was found on or around [the plaintiffs’] insured properties.”

However, both businesses’ claims were denied by the insurance companies, without any inspection or review of the physical locations or any documentation. According to the complaint, then “Hartford has thereby waived any right to inspect these premises, deny coverage for any reason related to conditions at these locations, or raise any defense related to conditions at these locations or facts specific to” the plaintiffs.

The complaint claims that such denials are just trying to minimize losses for the insurance companies. But the complaint says this is not necessary: “Collectively, the U.S. property-casualty insurance industry has about $800 billion in surplus, the industry term for assets minus liabilities.”

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Hartford FSG, Sentinel No Payout for Covid-19 Losses Complaint

July 22, 2020

Many businesses have lost income during the Covid-19 pandemic, due to state orders for businesses to shut down or consumers to stay at home. Now these businesses are making claims on their insurance policies, and many insurers are refusing to pay benefits. In this case, the insurance companies are Sentinel Insurance Company and its parent, the Hartford Financial Services Group, Inc.

Hartford FSG, Sentinel No Payout for Covid-19 Losses Complaint

Case Event History

Hartford FSG, Sentinel No Payout for Covid-19 Losses Complaint

July 22, 2020

Many businesses have lost income during the Covid-19 pandemic, due to state orders for businesses to shut down or consumers to stay at home. Now these businesses are making claims on their insurance policies, and many insurers are refusing to pay benefits. In this case, the insurance companies are Sentinel Insurance Company and its parent, the Hartford Financial Services Group, Inc.

Hartford FSG, Sentinel No Payout for Covid-19 Losses Complaint
Tags: Business Insurance, Covid-19 Related, Denial of Benefits, Insurance