At a time when the global coronavirus pandemic is wreaking havoc on public health and the U.S. economy, insurance companies are engaging in a public campaign declaring that COVID-19-related claims aren’t covered.
SOUTHFIELD, Mich. (PRWEB)
June 03, 2020
Sommers Schwartz, P.C., today announced it has brought a lawsuit on behalf of a class of similarly situated Michigan businesses forced to shut down their operations because of the COVID-19 emergency. The plaintiffs allege Hanover Insurance Group and Citizens Insurance breached their policies by denying the plaintiffs’ business interruption insurance claims.
The action, captioned Stanford Dental, PLLC v. The Hanover Insurance Group, Inc. and Citizens Insurance Company of America, Case 2:20-cv-11384, was filed in the U.S. District Court for the Eastern District of Michigan.
“At a time when the global coronavirus pandemic is wreaking havoc on public health and the U.S. economy, insurance companies are engaging in a public campaign declaring that COVID-19-related claims aren’t covered,” said Andrew Kochanowski, who represents the plaintiffs with fellow Sommers Schwartz attorneys Jason Thompson and Robert Sickels. “Insurers appear to be loudly proclaiming to policyholders, ‘If your business closed because of the virus, we can’t help you.’”
On March 24, 2020, Michigan Governor Gretchen Whitmer issued Executive Order No. 2020-21, which required non-essential workers to stay at home and businesses not involved with maintaining critical infrastructure to close their operations. The plaintiffs were all subject to, and not excepted from, the emergency Order.
The lawsuit alleges the plaintiffs each purchased a standard-form all-risk “Businessowners Coverage Form” property and casualty insurance policy from the defendants. The plaintiffs assert that the policy promised to cover direct physical property loss or damage, and that under a “Civil Authority” provision, the defendants were to pay lost net income, payroll costs, and other business expenses if the plaintiffs’ businesses were “suspended” for any non-excluded reason.
When the Michigan statewide shutdown order forced them to suspend their operations, the plaintiffs say the defendants invoked a so-called “virus exclusion” to systematically deny all business interruption coverage claims associated with the pandemic.
“Hanover and Citizens conveniently – but wrongly – interpret the virus exclusion in their favor,” added Mr. Kochanowski. “COVID-19 was not the direct cause of our clients’ property damage, nor were any of their businesses suspended because their premises needed to be decontaminated. Instead, Governor Whitmer issued the emergency order to ensure COVID-19 did not contaminate their premises or infect their personnel. The shutdown caused the losses, not the coronavirus.”
The plaintiffs seek damages from the alleged breach and a declaratory judgment that the defendants’ policies provide coverage for loss of business income and expenses precipitated by the March 24, 2020, Executive Order.
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Sommers Schwartz, P.C., based in Southfield, Michigan, represents plaintiffs in complex and class action litigation. Sommers Schwartz has extensive experience representing investors, homeowners, consumers, employees, and borrowers in class action litigation, and the firm has played lead roles in major cases for over 25 years resulting in recoveries of many millions of dollars for their clients and the classes they represent. For further information about Sommers Schwartz, please visit http://www.sommerspc.com.
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