In six US states, four different law firms – namely, DiCello Levitt Gutzler LLC, the Lanier Law Firm PC, Burns Bowen Bair LLP and Daniels & Tredennick – have launched six federal class action lawsuits against six insurer companies on Friday, the 17th of April 2020, in a coordinated attempt of seeking coverage under business interruption insurance policies arising from the COVID-19 pandemic.

To date, this is the most large-scale approach made by policyholders to obtain coverage under business interruption policies.

The involved US states were New York, Texas, California, Wisconsin, Oregon and Ohio. In New York, the complaints were filed against Certain Underwriters at Lloyd´s London, in Texas, against Aspen American Insurance Company, in California, against Topa Insurance Company, in Wisconsin, against Society Insurance, in Oregon, against Oregon Mutual Insurance Company, and in Ohio, against Owners Insurance Company. 

Each federal class action lawsuit includes claims by a variety of insured, who state that the insurance companies have wrongfully denied them purchased business income and civil authority coverage, even though policies do not contain an exclusion for losses caused by viruses or other communicable diseases such as the novel coronavirus. The plaintiff policyholders include, amongst others, restaurants, bakeries or nightclubs, who were all forced to shut down their businesses due to COVID-19. Although they had to close their businesses through no fault of their own, their claims have been denied, although they have paid high premiums for these policies in order to make use of them specifically in a situation like this. 

There have been similar lawsuits against insurers in relation to the COVID-19 pandemic before, like for example a federal class action that was filed on March 31st, 2020, in Illinois against Society Insurance, or another federal class action lawsuit that was filed in Florida on April 9th, 2020, against Lloyd´s London. 

The six purported class action lawsuits filed on the 17th of April, 2020, might signal an increase in the number of similar class action lawsuits filed throughout the United States, seeking class certification for large groups of policyholders in order to recover business income losses due to COVID-19. Whether the courts will actually certify the proposed classes has yet to be seen, as class action lawsuits against business interruption insurers are rare, and court certification of a plaintiff class requires that all the presented claims involve common questions of law and fact. 

The involved law firms have already been speaking to a great number of businesses that have been denied coverage by the involved insurance companies – thus, it is likely, that the complaints filed on the 17th of April are only the first in a series of actions that will be filed in the US against insurers in the following weeks.