Hartford, Sentinel No Coverage for Covid-19 Losses Class Action

This is one of a number of recent class actions on whether insurance companies should pay for losses related to closures due to Covid-19. In this case, a dental office brings suit against Hartford Financial Services Group, Inc. and Sentinel Insurance Company (a Hartford subsidiary).

The plaintiff, Reinol A. Gonzalez, DMD, PA has a dental practice in Davie, Florida. The business maintains an all-risk property insurance policy with The Hartford and Sentinel. The policy includes Business Income coverage, Extra Expense coverage, and Civil Authority coverage.

The complaint quotes the policy as saying, “We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration.’” The period of restoration is the time during which the property is “repaired, rebuilt, or replaced…”

It claims that the Extra Expense coverages include extra expenses incurred for example for steps taken to minimize the suspension of business.

Furthermore, it quotes the policy as saying that Civil Authority coverage applies “to the actual loss of Business Income you sustain when access to your ‘scheduled premises’ is specifically prohibited by order of a civil authority as the direct result of a Covered Cause of Loss to property in the immediate area of your ‘scheduled premises.’”

Finally, the complaint quotes a passage of the policy saying, “We will pay for loss or damage by ‘fungi,’ wet rot, dry rot, bacteria, and virus.”

The Governor of Florida has issued emergency order closing non-essential businesses. The complaint claims Covid-19 “caused direct physical loss of and/or damage to the insured premises under the Policy by … damaging the property, denying access to the property, preventing customers and patients from physically occupying the property…” and other such things.

The complaint defines three classes.

The Business Income Coverage Class is all persons and entities with Business Income coverage under a property insurance policy issued by the defendants who suffered a suspension of business due to Covid-19, and for which the defendants have denied a claim for the losses or otherwise failed to acknowledge, accept as a covered loss, or pay as a covered loss.

The Civil Authority Coverage Class is all persons and entities with Civil Authority coverage under a property insurance policy issued by the defendants, who suffered loss of Business Income or Extra Expense caused by an action of a civil authority, and for which the defendants have denied a claim for the losses or otherwise failed to acknowledge, accept as a covered loss, or pay as a covered loss.

The Extra Expense Coverage Class is all persons and entities with Extra Expense coverage under a property insurance policy issued by the defendants, which sought to avoid or minimize the suspension of business caused by Covid-19 or the actions of civil authorities in response to Covid-19, and for which the defendants have denied a claim for the losses or otherwise failed to acknowledge, accept as a covered loss, or pay as a covered loss.

Article Type: Lawsuit
Topic: Insurance
Tags: Business Insurance, Covid-19 Related, Denial of Benefits, Insurance