Hartford, Twin City Insurance with Virus Coverage Class Action

Recently a number of class actions have been filed claiming that insurance companies should be reimbursing businesses closed by Covid-19 for business losses and related extra expenses. This one is similar, bringing suit against The Hartford Financial Services Group, Inc. and Twin City Fire Insurance Company. However, there’s at least one twist to it: The complaint alleges that the policy specifically covers virus-related losses.

The plaintiff in this case, Black Magic, LLC, doing business as Black Magic Café, owns two restaurants in Charleston, South Carolina. Its income comes from selling food and drinks on the premises of the restaurants.

On March 17, 2020, South Carolina’s governor issued an executive order closing food and beverage establishments for on-premises or dine-in services. The complaint claims, “A series of other federal, state, and local government statutes, regulations, executive orders, ordinances, and other governmental mandates have similarly regulated Black Magic’s business” in response to Covid-19.

Black Magic had an insurance policy with Hartford and Twin City, a “Spectrum Business Owner’s Policy” written by Hartford. (Twin City is believed to be a subsidiary of Hartford, the complaint claims.)

This all-risk policy includes coverages for Business Income, Extra Expense, Civil Authority, Extended Business Income, and Business Income from Dependent Properties. They respond to business income losses from “direct physical loss,” the complaint says, a term which is not defined by the policy.

After the SARS outbreak in the early 2000s, many policies included an Exclusion of Loss Due to Virus or Bacteria. In fact, the complaint alleges that the policy expressly covers virus-related losses, with a form for Limited Fungi, Bacteria, or Virus Coverage. This provides coverage for “[d]irect physical loss or direct physical damage to Covered Property caused by … virus” upon a showing of a “specified cause of loss.”

Black Magic filed a claim with Hartford and Twin City on or about March 24, 2020 due to the orders closing the restaurants.

In reply, it received a form denial letter on March 31.

On April 2, counsel for Black Magic answered the denial letter, supporting the claim. On April 10, it received another denial letter.

The complaint alleges that Black Magic has in fact suffered a “direct physical loss” because “the Orders have caused it to lose access to and use of their commercial business property.”

The Nationwide Class for this action is all business entities and individuals who

  • Entered into an insurance contract with Hartford or Twin City that provides Business Income and Extra Expense Coverage and contains the form for Limited Fungi, Bacteria, or Virus Coverage; and
  • Suffered business income and other losses due to government orders issued in response to Covid-19.
Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Hartford, Twin City Insurance with Virus Coverage Complaint

May 4, 2020

Recently a number of class actions have been filed claiming that insurance companies should be reimbursing businesses closed by Covid-19 for business losses and related extra expenses. This one is similar, bringing suit against The Hartford Financial Services Group, Inc. and Twin City Fire Insurance Company. However, there’s at least one twist to it: The complaint alleges that the policy specifically covers virus-related losses.

Hartford, Twin City Insurance with Virus Coverage Complaint

Case Event History

Hartford, Twin City Insurance with Virus Coverage Complaint

May 4, 2020

Recently a number of class actions have been filed claiming that insurance companies should be reimbursing businesses closed by Covid-19 for business losses and related extra expenses. This one is similar, bringing suit against The Hartford Financial Services Group, Inc. and Twin City Fire Insurance Company. However, there’s at least one twist to it: The complaint alleges that the policy specifically covers virus-related losses.

Hartford, Twin City Insurance with Virus Coverage Complaint
Tags: Business Insurance, Business Losses, Denial of Benefits, Insurance