A Berkeley-based home and garden store has filed a lawsuit against its insurance company for not honoring its business interruption coverage. According to a Berkeleyside news report, The Gardener has been located in the Fourth Street shopping district for 36 years. The owner of the store filed the claim against Ohio Security Insurance Company after facing serious financial harm because of the closure of her stores in Berkeley, San Francisco and Healdsburg. Like all retailers, the store was forced to shut down temporarily following the statewide shelter-in-place orders to stop the spread of the coronavirus.
Business Interruption Claim Denied
The insurance company, which is affiliated with Liberty Mutual Insurance Company, denied The Gardener’s business interruption claim, the lawsuit that was filed in federal court said, adding that this action by the insurance company leaves the store in financial distress, precisely the situation it sought to avoid when it obtained coverage for business interruptions.
The owner, Alta Tingle, said she believed the business interruption insurance would cover a business downturn due to conditions beyond one’s control. And a global pandemic certainly fits that description. Tingle said in a statement that she believed purchasing business interruption insurance would help her navigate crisis situations such as the coronavirus pandemic.
Justice for Businesses
Insurance companies around the nation have been insisting that business interruption coverage is only paid when physical damage to the store or its contents occurs. Many insurance policies have a “virus exclusion” clause, which means no funds need to be paid when a virus is responsible for the business decline.
Several insurance companies inserted these clauses after recent virus outbreaks such as SARS and the H1N1 flu or bird flu. The Gardener’s lawsuit though, contends that the virus is not the reason their three stores shut down, but Gov. Gavin Newsom’s March 19th statewide shelter-in-place order. A barbershop in Florida has also filed a lawsuit against the same insurance company over this matter. Several restaurants have also filed similar lawsuits against their insurers.
It is evident that small businesses, which form the backbone of our local economies, have taken the brunt of coronavirus closures. Insurers should do the right thing by their customers who have diligently paid their premiums, in many cases for decades. If you own a business that has been denied its claim, please contact our business interruption trial attorneys to obtain more information about pursuing your rights.