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The range of policyholders filing lawsuits against insurers over coronavirus-related business interruption claims continued to expand Wednesday with the Simon Wiesenthal Center suing Chubb Ltd. for coverage.
The dozens of lawsuits filed since the outbreak of COVID-19 in the United States have largely been filed by restaurants and service industry firms. Over the past two weeks, however, lawsuits by health care companies and an aerospace products company have also been filed, in addition to Wednesday’s suit from the Los Angeles-based Jewish human rights organization.
In the lawsuit, Simon Wiesenthal Center Inc. et al v. Chubb Group of Insurance Cos., the organization states it has been forced to cancel fundraising events and close operations due to government-ordered lockdowns intended to stem the spread of COVID-19.
The Chubb policy provides coverage for income lost due to civil authority orders and does not include a virus or pandemic exclusion, court papers say. “The insurance industry is well aware of and utilizes both ‘virus’ and ‘pandemic’ exclusions,” the suit states.
In addition, the pollution exclusion in the policy “does not include the word virus,” the suit states.
Chubb declined to comment on the suit.
The Simon Wiesenthal Center has retained John Houghtaling, managing partner at Gauthier, Houghtaling LLP in New Orleans, who represents several restaurants who were among the first businesses to sue their insurers over claims for income lost due to COVID-19.
Last week, a nonprofit hospital in Windber, Pennsylvania, sued its insurer in Windber Hospital d/b/a Chan Soon Shiong Medical Center v. Travelers Property Casualty Co. of America. The proposed class action filed in U.S. District Court for the Western District of Pennsylvania in Pittsburgh says that the hospital was forced to close and furlough workers under a government-ordered lockdown. The hospital argues that the coronavirus causes damage to property that triggers coverage under the civil authority clause in its policy.
Travelers, which has been subject to several suits, filed a countersuit against two of its policyholders earlier this month seeking a declaratory ruling on the issue. The insurer argued that virus-related losses are excluded from business interruption policies issued to the policyholders and that even without the exclusion coverage would still be denied because the virus did not cause physical damage.
Insurance trade organizations have made similar arguments regarding COVID-19 coverage.
On Monday, a Philadelphia dental practice sued its insurer for coverage in Laudenbach Periodontics and Dental Implants Ltd. v. Liberty Mutual Insurance Group. The policyholder argues that the virus exclusion in the policy does not apply because the losses were caused by the government-ordered shutdown of its business rather than being directly caused by the virus.
In addition, “Certain exclusions in the policy that contradict the civil authority coverage are not enforceable as they violate Pennsylvania public policy as contracts of adhesion,” the complaint states.
Liberty Mutual declined to comment.
A dentist in Texas was among a group of policyholders, consisting largely of restaurants and bars, that filed proposed class actions earlier this month.