Star Cinema Grill thought it had all its bases covered after purchasing “pandemic event” insurance coverage. Although pandemics aren’t a common occurrence, with nine dine-in theatre locations spread across Houston, Texas, the company’s owner didn’t want to take the risk and forgo the insurance. Instead, the company paid nearly $40,000 in premiums for $1 million in coverage, giving the owners of Star Cinema Grill some sort of peace of mind [Source: KHOU 11].
Unfortunately, that peace of mind was replaced with “headaches and hassles” after the COVID-19 pandemic resulted in all theatre locations being forced to close and the company without a way to bring in any revenue. While the company initially thought that it would be able to recover some money from its “pandemic event” insurance policy, Lloyd’s of London turned around and denied the company’s claim. Star Cinema Grill quickly turned to their insurance claims denial attorney for help who then filed a lawsuit against certain underwriters at Lloyd’s of London.
Here’s why Lloyd’s of London denied Star Cinema’s COVID-19 claim.
According to the lawsuit, the company’s insurance broker claimed Star Cinema’s claim “is not covered because COVID-19 is “not a named disease.” The lawsuit goes on to say that the policy “lists more than two dozen pathogens, including SARS-associated coronavirus and any mutations or variations of the disease.” The company’s attorney argued that the COVID-19 is, in fact, a variation and cites that the National Institute of Allergy and Infectious Diseases states on its website that COVID-19 was previously named SARS-CoV-2.
Star Cinema’s attorney says that the company “has an expectation, since its done its part, paid its premium, that the insurance company is going to stand up and do what its part is, which is to pay the claim.” The company says that when it purchased its policy from underwriters at Lloyd’s of London, they were told that they would be “reimbursed [for] loss of wages, cleaning, and other mitigation-related costs and crisis management expenses if a public health authority shut down operations.”
The company’s lawyer believes Lloyd’s of London “is backing out and trying to renege on these types of claims” which is why they have turned to the legal system for help.
When should I hire a Texas insurance claims denial lawyer?
If your insurer denied your business interruption claim alleging your policy excludes viruses, bacteria, and pandemics, you should contact USAttorneys.com to get connected with local Texas insurance claims denial lawyers. Because your policy may be interpreted in multiple ways, it might be necessary to involve the courts if you want to see your COVID-19 claim approved.