Twin City Fire Insurance Rejection of Covid-19 Closure Claims Class Action

In a now-familiar pattern, this class action brings suit against an insurance company which is rejecting claims for business losses due to closures to prevent the spread of Covid-19. According to the complaint, the Harford Financial Services Group, Inc. and its subsidiary Twin City Fire Insurance Company, have rejected claims from its insureds, claiming that its policies do not cover Covid-19 closure business losses.

The class for this action is all policyholders in the US who bought commercial property coverage, including business or interruption income and extra expense coverage from the Hartford or Twin Cities and who have been denied coverage under their policy for lost business income after being ordered by a government entity to shut down or curtail business in response to the Covid-19 pandemic.

The plaintiff in this case is Leal, Inc., which operates a boutique clothing store in Columbus, Ohio. Leal is insured by Twin Cities and the Hartford. The policy is an “all-risk” policy that covers “direct physical loss of or physical damage to Covered Property … caused by or resulting from any Covered Cause of Loss.”

The policy does not define the terms “direct physical loss of or physical damage to…” However, the complaint alleges that “the use of the disjunctive ‘or’ in the phrase ‘direct physical loss of or physical damage to’ means that coverage is triggered if either a physical loss of property or damage to property occurs. The concepts are separate and distinct and cannot be conflated.”

The complaint goes on to claim, “Physical loss of, or physical damage to, property may be reasonable interpreted to occur when a covered cause of loss threatens or renders property unusable for its intended purpose or unsafe for normal human occupancy and/or continued use.”

The policy includes Business Income and Extra Expense Coverage, as well as coverage for business income losses due to an “order of civil authority” that forbids access to the covered property.

The complaint says that various studies have shown that Covid-19 germs can live on surfaces for days, and that this therefore is a cause of physical loss or damage.

Governor Mike DeWine declared a State of Emergency on March 9, 2020. The Ohio Department of Health issued an order closing all non-essential businesses, including Leal, on March 22. The store was able to resume “significantly limited operations” on May 12. The complaint alleges that this has led to “a substantial loss of business income and additional expenses covered under the Policy.”

However, Leal’s insurance claim was rejected because the company contended that the losses don’t come from “property damage at your place of business or in the immediate area” and because the policy contains a Virus Exclusion.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

Twin City Fire Insurance Rejection of Covid-19 Closure Claims Complaint

July 2, 2020

In a now-familiar pattern, this class action brings suit against an insurance company which is rejecting claims for business losses due to closures to prevent the spread of Covid-19. According to the complaint, the Harford Financial Services Group, Inc. and its subsidiary Twin City Fire Insurance Company, have rejected claims from its insureds, claiming that its policies do not cover Covid-19 closure business losses.

Twin City Fire Insurance Rejection of Covid-19 Closure Claims Complaint

Case Event History

Twin City Fire Insurance Rejection of Covid-19 Closure Claims Complaint

July 2, 2020

In a now-familiar pattern, this class action brings suit against an insurance company which is rejecting claims for business losses due to closures to prevent the spread of Covid-19. According to the complaint, the Harford Financial Services Group, Inc. and its subsidiary Twin City Fire Insurance Company, have rejected claims from its insureds, claiming that its policies do not cover Covid-19 closure business losses.

Twin City Fire Insurance Rejection of Covid-19 Closure Claims Complaint
Tags: Business Insurance, Covid-19 Related, Denial of Benefits, Insurance