Travelers Insurance Claims for Coronavirus Closing Losses Class Action

The coronavirus pandemic has caused disruptions to businesses because of mandatory closings or customers staying home. In this class action, the complaint alleges that Travelers Casualty Insurance of America should pay certain losses of a dentist office required to close by the state governor’s order. Interestingly, the complaint has been filed before the dentist has made a claim and before Travelers has rejected it.

Ryan M. Fox has a dental practice in Kirkland, Washington. Fox cannot at this time provide dentistry services because of a state-ordered mandated closure.

Fox’s business has Businessowners Property Coverage with related endorsements. The business property includes property owned and leased by Fox for its dentistry business activities.

According to the complaint, “Travelers’ Businessowners Property Coverage promises to pay [Fox] for risks of ‘Direct Physical Loss’ to covered property and includes coverage for risks of both ‘loss of or damage to’ covered property.” The policy includes Business Income Coverage, Extra Expense Coverage, Extended Business Income Coverage, and Civil Authority Coverage.

Governor Inslee issued a ‘Stay Home, Stay Healthy’ order that “required the closure of all non-essential businesses, including [Fox’s] dental practice.” Because of this, the complaint contends, “[Fox’s] property sustained direct physical loss or damage as a result of the proclamations and orders.”

The complaint claims that the property will continue to sustain these losses, including “business interruption, extra expense, interruption by civil authority, and other expenses.” In the meantime, the “property cannot be used for its intended purposes.”

Finally, the complaint says, “[Fox] will soon make a claim with Travelers for its loss, and upon information and belief, its claim will be denied.”

The complaint proposes a number of classes.

The Business Income Coverage Breach of Contract Class is all persons and entities in the US insured under a Travelers policy with Business Income Coverage who suffer a suspension of their business at the covered premises due to Covid-19 and whose Business Income claim was denied by Travelers.

The Extra Expense Breach of Contract Class is all persons and entities in the US insured by a Travelers policy with Extra Expense coverage who sought to minimize the suspension of business at the covered premises in connection with Covid-19 and whose Extra Expense coverage Claim was denied by Travelers despite their efforts to minimize the suspension of their business.

The Extended Business Income Breach of Contract Class is all persons and entities in the US insured by a Travelers policy with Extended Business Income coverage who suffered a suspension of their business at the covered premises due to Covid-19.

The Civil Authority Breach of Contract Class is all persons and entities in the US insured by a Travelers Policy with Civil Authority coverage who suffered a loss of business income or extra expense due to the impact of Covid-19 and whose Civil Authority claim was denied by Travelers.

Also proposed are four declaratory relief classes, each related to one of the classes above.

Article Type: Lawsuit
Topic: News
Tags: Business Insurance, Insurance, Nonpayment of Benefits