Scottsdale Insurance Co. Business Losses from Covid-19 Class Action

This is one of a number of class actions brought by businesses against their insurers, alleging that the insurance company should provide benefits for business losses and related expenses during the closures due to the Covid-19 pandemic. In this case, the action brings suit against the Scottsdale Insurance Company, which insures the plaintiff in this case under an all-risk commercial insurance policy.

On March 11, 2020, the World Health Organization (WHO) declared the Covid-19 outbreak a global pandemic. WHO said it was “concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction.”

Less than a week later, on March 16, the US government issued guidance for “30 Days to Slow the Spread” of the coronavirus. In addition, many state governments and local authorities enacted measures to the same end. These included orders suspending or curtailing the operations of non-essential businesses and asking citizens to stay at home.

These orders have had terrible effects on the economy and particularly small businesses. The plaintiffs in this case, GV KB Store, LLC and GV Siestakey, LLC, both of which do business as Stefano Versace Gelato and serve ice cream and other food and beverages, are two such businesses.

According to the complaint, all-risk commercial property insurance companies, like the ones held by these businesses, offer something called “business interruption coverage” or “business income loss and extra expense coverage.” These coverages, the complaint says, “promise to indemnify the policyholder for actual business income losses incurred when business operations are involuntarily suspended, interrupted, or curtained by ‘direct physical loss of or damage to’ the property or when access to the premises is prohibited by a civil authority order issued because of damage to nearby property.”

However, many companies, including Scottsdale, are claiming they do not have an obligation to pay for business income losses and other expenses related to the Covid-19 emergency.

The aim of this class action is to obtain “a declaratory judgement that affirms that the national emergency declared over the spread of Covid-19 constitutes physical loss or damage to the insured property, triggering coverage under business income loss and extra expense coverage provisions, and generally under the ‘all risk’ provisions of the standardized policies.”

The Nationwide Class for this action is all entities who have standard-form, all-risk commercial property insurance policies with Scottsdale where the policies provide for business income loss and extra expense coverage and do not exclude coverage for a national emergency due to a pandemic, and who have physical loss of or damage to the insured property due to the Covid-19 emergency and resulting civil authority orders.

A Florida Subclass, for Florida entities, has also been defined.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Scottsdale Insurance Co. Business Losses from Covid-19 Complaint

May 1, 2020

This is one of a number of class actions brought by businesses against their insurers, alleging that the insurance company should provide benefits for business losses and related expenses during the closures due to the Covid-19 pandemic. In this case, the action brings suit against the Scottsdale Insurance Company, which insures the plaintiff in this case under an all-risk commercial insurance policy.

Scottsdale Insurance Co. Business Losses from Covid-19 Complaint

Case Event History

Scottsdale Insurance Co. Business Losses from Covid-19 Complaint

May 1, 2020

This is one of a number of class actions brought by businesses against their insurers, alleging that the insurance company should provide benefits for business losses and related expenses during the closures due to the Covid-19 pandemic. In this case, the action brings suit against the Scottsdale Insurance Company, which insures the plaintiff in this case under an all-risk commercial insurance policy.

Scottsdale Insurance Co. Business Losses from Covid-19 Complaint
Tags: Business Insurance, Business Losses, Denial of Benefits, Insurance