By Mike Curley

Law360 (June 30, 2020, 3:24 PM EDT ) New York law firm Siegel & Siegel PC has hit Hartford Casualty Insurance Co. with a proposed class action alleging the insurer has wrongfully denied coverage of losses incurred thanks to the coronavirus pandemic, joining the ever-growing number of businesses across the country making similar claims.

In a complaint filed Monday, the firm said its "all risks" policy contains no exclusions for viral or bacterial pandemics, and the shutdown of its operations constitutes a physical loss under the policy. Yet Hartford denied coverage, telling the firm that the virus does not constitute a physical loss.

Siegel & Siegel's suit mirrors dozens of individual suits and class actions filed against insurance companies in the last few months, each alleging that the insurers have given a blanket denial to coverage of all claims related to the pandemic. In the last few weeks, such suits have been filed by minor league baseball teams, a Michigan chiropractor and a group of Florida restaurants.

"The insurance industry appears to be taking a uniform approach to the current pandemic: deny coverage even when the policy they drafted and offered to insureds, and the policy paid for by the insureds, does not contain an exclusion for pandemic-related or virus-related losses," Siegel & Siegel told the court. "Plaintiffs' policy with Hartford is one such policy and exemplifies the broken promise from insurance companies across the country."

According to the complaint, Siegel & Siegel had to close shortly after the mayor of New York City and the governor of New York signed orders directing all nonessential businesses to close in an attempt to slow the spread of COVID-19. Though it attempted to be designated essential, Siegel & Siegel said it was specifically designated nonessential by the state.

The firm made a claim for its coverage on March 20 and received a letter of denial saying it hadn't suffered a direct physical loss on April 14, according to the complaint.

Siegel & Siegel, however, alleged that such government shutdowns have been held to constitute a physical loss by the courts, adding that the city's shutdown order specifically noted that COVID-19 is "causing property loss and damage."

As such, the pandemic triggers coverage for lost business income and extra expenses resulting from the shutdown, the firm said. In addition, the firm alleged the civil authority clause grants it coverage for shut down due to government orders.

Siegel & Siegel seeks to represent a nationwide class for an injunction declaring Hartford owes coverage, a nationwide class for breach of contract claims and a New York subclass for those who were denied claims after buying one of Hartford's policies in the state.

An attorney for Siegel & Siegel declined to comment.

Representatives for Hartford could not immediately be reached for comment Tuesday.

Siegel & Siegel is represented by Darren T. Kaplan of Kaplan Gore LLP, Patrick J. Stueve, Bradley T. Wilder and Curtis Shank of Stueve Siegel Hanson LLP, J. Kent Emison of Langdon & Emison LLP, John J. Schirger, Matthew W. Lytle and Joseph M. Feierabend of Miller Schirger LLC and Richard F. Lombardo, Dawn M. Parsons, Michael F. Barzee and Rachael D. Longhofer of Shaffer Lombardo Shurin PC.

Counsel information for Hartford was not immediately available.

The case is Siegel & Siegel PC et al. v. Hartford Casualty Insurance Co., case number 1:20-cv-04993, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Jeff Sistrunk and Daphne Zhang. Editing by JoVona Taylor.

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