Liberty Mutual Insurance Coverage for Business Losses Class Action

Because of the financial strains caused by closings due to the Covid-19 pandemic, many businesses have lost income. Some are looking to insurance policies for help. The complaint for this class action seeks “a declaratory judgment that affirms that the orders issued by civil authorities to stop the spread of the Covid-19 outbreak triggers coverage” for business losses and extra expenses under certain commercial insurance policies. It claims that Liberty Mutual Insurance Company has breached its contractual obligations under its insurance policies.

Many governmental authorities, such as states, have issued emergency orders to close businesses, prohibit large gatherings, and otherwise order measures to inhibit the spread of the coronavirus. According to the complaint, “Over 40 states within the United States issued some type of ‘stay-at-home’ Emergency Order closing private non-essential business operations.”

The result “has been catastrophic for most of these non-essential businesses, especially retail establishments that were forced to close, furlough employees, and endure a sudden shutdown of cash flow that threatens their survival.”

However, some businesses—including Biltrite Furniture, Inc., the plaintiff in this case—have all-risk commercial property insurance policies. The complaint says, “These policies promise to indemnify the policyholder for actual business losses incurred, when public access is prohibited because of direct physical loss or damage to the property, or by a civil authority order that restricts or prohibits access to the property.”

Such “business interruption coverage,” the complaint says, is standard in most all-risk commercial property insurance policies.

The complaint first seeks “a declaratory judgment that affirms that the orders issued by civil authorities to stop the spread of the Covid-19 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 [Liberty Mutual is] liable for the losses suffered by policyholders.”

Apparently, Liberty Mutual does not agree with this opinion. The complaint’s second intention is to bring “a claim against [Liberty Mutual] for its breach of its contractual obligation under common all-risk commercial property insurance policies to indemnify [Biltrite Furniture] and other similarly situated for business losses and extra expenses, and related losses resulting from actions taken by civil authorities to stop the human-to-human and surface to human spread of the Covid-19 outbreak.”

The class for this action is all entities who have standard all-risk commercial property insurance policies with Liberty Mutual which 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 Wisconsin Subclass has also been proposed.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Liberty Mutual Insurance Coverage for Business Losses Complaint

April 24, 2020

Because of the financial strains caused by closings due to the Covid-19 pandemic, many businesses have lost income. Some are looking to insurance policies for help. The complaint for this class action seeks “a declaratory judgment that affirms that the orders issued by civil authorities to stop the spread of the Covid-19 outbreak triggers coverage” for business losses and extra expenses under certain commercial insurance policies. It claims that Liberty Mutual Insurance Company has breached its contractual obligations under its insurance policies.

Liberty Mutual Insurance Coverage for Business Losses Complaint

Case Event History

Liberty Mutual Insurance Coverage for Business Losses Complaint

April 24, 2020

Because of the financial strains caused by closings due to the Covid-19 pandemic, many businesses have lost income. Some are looking to insurance policies for help. The complaint for this class action seeks “a declaratory judgment that affirms that the orders issued by civil authorities to stop the spread of the Covid-19 outbreak triggers coverage” for business losses and extra expenses under certain commercial insurance policies. It claims that Liberty Mutual Insurance Company has breached its contractual obligations under its insurance policies.

Liberty Mutual Insurance Coverage for Business Losses Complaint
Tags: Business Insurance, Business Losses, Insurance