Claims Amongst COVID-19
On or about March 16, 2020, what has been identified as the first COVID-19 lawsuit was filed – a declaratory judgment action filed on behalf of the owners of Oceana Grill in New Orleans as against Lloyd’s of London and Louisiana Governor John Edwards. The suit alleges that the ‘all risk’ insurance policy Oceana purchased from Lloyd’s must cover the restaurant’s mandated reduction in hours of operation and the resulting business loss. Per Oceana (represented by Gauther Murphy & Houghtaling, LLC of New Orleans), the ‘all risk’ policy excluded losses resulting from pathogens only to the extent they were employed maliciously or as an act of terror, further pleading its case as follows:
A declaratory judgment determining that the coverage provided under the policy will prevent the plaintiffs from being left without vital coverage acquired to ensure the survival of their business should operations cease due to a global pandemic virus and civil authorities’ response.
While some rogue media outlets have called the 2019-2020 Coronavirus an exaggerated mass hysteria that will unlikely create significant physical damage, the scientific and those personally affected by the virus, recognize the Coronavirus as a cause of real physical loss and damage.
The virus is physically impacting public and private property, and physical spaces in cities around the world. Any effort by Lloyd’s to deny the reality that the virus causes physical damage and loss would constitute a false and potentially fraudulent misrepresentation that could endanger policyholders and the public.
Citing Governor Edwards’ order that limited gatherings to 250 people (and excepting only places “’like’ airports, medical facilities, shopping centers or malls, office buildings, factories or manufacturing facilities, or grocer or department stores”), Oceana alleges that limiting its business to 50 percent capacity (250) and limiting its hours of operation inescapably will result in significant losses. In terms of relief, Oceana seeks clarification of the Governor’s order and of its policy coverage:
Plaintiffs seek a Declaratory Judgment on whether the Governor’s March 13, 2020 Civil Authority Order applies to restaurants whose capacity exceeds 250 people.
Plaintiffs also seek a Declaratory Judgment to determine whether the Governor ‘s March 13, 2020 Order and the Mayor’s March 15, 2020 restrictions trigger the civil authority provision of the policy issued to the plaintiff.
Plaintiffs ask the Court to affirm that because the policy provided by Lloyd’s does not contain an exclusion for a viral pandemic, the policy provides coverage to plaintiffs for any future civil authority shutdowns of restaurants in the New Orleans area due to physical loss from Coronavirus contamination and that the policy provides business income coverage in the event that the coronavirus has contaminated the insured premises.
About: Shuman McCuskey Slicer PLLC is a civil defense litigation law firm defending businesses, professionals, and insurers in high-stakes litigation. The firm has over 20 attorneys licensed to practice in West Virginia, Virginia, Ohio, Kentucky, Pennsylvania, Maryland, and New York. SMS was founded in Charleston, WV, where it remains headquartered and has additional offices in Morgantown, WV, and Winchester, VA.
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