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Popular California Clothing Brand Files COVID-19 Business Interruption Lawsuit Against Insurer

Important Ruling Reached in Business Interruption Claims Against Insurance Companies

Oaklandish, a popular California clothing brand known for its Oakland pride apparel, is suing its insurance provider for denying pandemic-related coverage. According to a report in The Mercury News, Oaklandish joins as one of the latest businesses to sue its insurance provider. Like many retailers statewide, Oaklandish was required under state laws to shut down during the mandated stay-at-home order, which took effect mid-March.

Denial at a Time of Financial Hardship

A lawsuit that was filed in the U.S. District Court, Northern District of California, says Oaklandish, which was facing severe financial hardship, filed a claim with its insurer Sentinel Insurance Company for business interruption coverage. However, the claim was promptly denied. The lawsuit alleges that the reasoning behind the denial of the claim was based on an “unreasonable reading of its policy,” leaving the company in financial turmoil – exactly the situation it had hoped to avoid when it obtained coverage for business interruptions.

Attorneys for the company say the insurance company in question has been doing “blanket denials” claiming that the coverage does not apply. Like many business owners across California and the nation, Oaklandish purchased comprehensive coverage believing that it would apply to business interruptions, especially when it has done the right things to protect its business and the public.

However, the lawsuit states it is now facing mounting costs from the insurance company’s failure to cover losses stemming from the pandemic. Oaklandish has filed the claim as part of a class action lawsuit, which means more than 100 other businesses throughout the state could join in the lawsuit. Although the lawsuit doesn’t seek specific damages, they are expected to be at least in the range of $5 million.

Businesses Should Be Compensated

Insurance companies have maintained during this time that viruses are “outside the scope of business interruption coverage.” But our business interruption claim lawyers strongly oppose this view. We believe that a number of insurance policies do apply to the current pandemic. We are ready to fight for clients to make sure they are compensated properly. These businesses have paid their premiums for many years with the hope that they would be compensated when they suffer financial hardship due to business interruption.

If your insurer has denied your business interruption claim, please contact our office to find out how we can help you. You may be able to join a class action lawsuit to hold the insurance company accountable as well.

 

Source: https://www.mercurynews.com/2020/07/21/clothing-brand-oaklandish-sues-over-covid-19-insurance/

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