PHILADELPHIA – A New York-based bed and breakfast has filed class action litigation against the Lloyd’s of London insurance company and its underwriter, for failing to provide it and fellow class members with business interruption coverage during the coronavirus pandemic.
Fire Island Retreat (individually and on behalf of all others similarly situated) of Fire Island Pines, N.Y. filed suit on May 15 in the U.S. District Court for the Eastern District of Pennsylvania versus Lloyd’s Of London and underwriter Brit Global Specialty USA, Inc., of Chicago, Ill.
Lloyd’s of London had provided the plaintiff with an insurance policy covering the dates of Aug. 14, 2019 to Aug. 14, 2020, which according to the lawsuit, included coverage for certain losses under the concept of business interruption coverage.
After the pandemic resulted in executive orders from New York Gov. Andrew Cuomo resulting in the shutdown of Fire Island Retreat and many other businesses, the suit states the plaintiff suffered significant losses during what is normally its busiest time of year and therefore, submitted a claim declaring such to the defendants.
Despite having a policy which did not have virus or pandemic exclusions, the plaintiff asserts its insurance claim was still rejected by the defendants.
“Plaintiff specifically sought and paid premiums to defendants for coverage to ensure the survival of the business due to business closure ordered by the civil authority. The reasonable expectation of plaintiff was that the business interruption policy included coverage when a civil authority forced closure of businesses for an issue of public safety,” the suit states.
“Plaintiff filed a notice of loss report in March 2020 seeking coverage for lost business income. As of this filing, defendants have not paid plaintiff for his losses nor have defendants notified plaintiff if, and when, they will pay his claim for actual loss of business. It was plaintiff’s reasonable expectation that if civil authorities forced closure of his business, the loss of income from such civil authority action would be covered under the policy.”
The plaintiff says this same denial of coverage has taken place with other clients of Lloyd’s in Pennsylvania, numbering in the hundreds, thereby making the certification of the case as a class action appropriate.
The plaintiff is seeking a declaratory judgment saying the pandemic and related shutdown orders activate business interruption coverage for it and other members of the class, and for a count of breach of contract, compensatory damages resulting from defendants’ breaches of plaintiff’s policy and other class members’ policies and seek all other relief deemed appropriate by this Court, including attorneys’ fees and costs, pre- and post-judgment interest and such further relief as may be appropriate, plus a trial by jury.
The plaintiff is represented by Dianne M. Nast of Nastlaw in Philadelphia and Michael L. Roberts of Roberts Law Firm in Little Rock, Ark.
The defendant has not yet secured legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-02312
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com