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A group of Philadelphia restaurants and bars filed a suit seeking class action status against Allianz SE units Tuesday for business interruption coverage in connection with the COVID-19 pandemic.
“Plaintiffs reasonably expected the claims for loss of business income and extra expenses arising from the inability to use their physical locations would be paid unless specifically and unambiguously excluded,” according to the lawsuit Tria WS LLC et al. v. Allianz Global Risks US Insurance et al., which was filed in U.S. District Court in Philadelphia.
Allianz “reneged on its promises and wrongfully failed to fulfill its contractual obligation to provide coverage,” court papers say.
The lawsuit seeks declaratory judgments and charges the insurers with breach of contract and bad faith.
A spokeswoman said in a statement, “We do not comment on pending litigation.”
Plaintiff attorney Adam J. Gomez, a director at Grant & Eisenhofer PA in Wilmington, Delaware, which filed the suit, said while there have been “predictable results” in other COVID-19 business interruption lawsuits in certain jurisdictions, which have dismissed comparable litigation, “there’s still rulings outstanding from other jurisdictions” that have ruled otherwise on the issue of covered losses or damages.
“We’re certainly optimistic that the Eastern District of Pennsylvania is going to read these policies literally as they are required to do” and “hold the insurers to the exact language they used” in their coverage, he said.
A federal court in Texas dealt another blow to commercial policyholders seeking coverage for coronavirus-related business interruption losses earlier this month, ruling that pandemic-related lockdowns did not constitute a direct physical loss for a group of barbershops.
In Missouri, though, a federal judge allowed a suit filed but a group of hair salons against their insurer to go forward.
More insurance and risk management news on the coronavirus crisis here.