S.F. Retailer Sues Insurer For Denying COVID-19 Claim
Mudpie, a 44-year-old boutique for children’s clothing, toys and accessories in San Francisco, scaled back its commerce earlier this year when non-essential businesses were required to shutter to prevent the spread of COVID-19. It recently reopened for curbside pickup service and has continued to run its ecommerce shop mudpie-sf.com.
The mother-and-daughter team of owners Cheryl and Sarah Perliss thought that the store’s business-interruption insurance would help support them during the crisis. But their claim with Travelers Casualty Insurance Company of America was denied, according to a statement from the boutique’s lawyers.
On May 11, Mudpie, Inc. filed a class action lawsuit on behalf of California’s retail stores. The suit alleges that small businesses have been wrongfully denied coverage for losses resulting from following government-mandated guidelines and closing shops to help prevent the spread of COVID-19. Mudpie has been represented by Gibbs Law Group and Cohen Milstein Sellers and Toll PLLC, said Geoffrey Graber, a Cohen Milstein Sellers and Toll partner. He is head of the firm’s COVID-19 Business Interruption Insurance Coverage Task Force.
“Retailers and other small business owners who have paid business-interruption insurance premiums should expect insurers to fulfill the obligations to which they mutually agreed,” Graber said.
His colleague, Amy Zeman of Gibbs Law Group said that Mudpie is not alone. “This is one of many lawsuits we are preparing to file on behalf of small business owners who have been broadly refused coverage by major insurance companies,” she said.
A statement from Travelers said the company was not liable for the issue that had upended Mudpie’s business.
“We recognize that the spread of COVID-19 has affected many of us in ways we never could have expected, and we are taking many steps to support our customers, agents, brokers and communities during this difficult time," Travelers said. "In our standard commercial-property policies that include business-interruption coverage, we have very specific exclusions stating that losses resulting from a virus or bacteria are not covered."
Zeman took issue with the statement made by Travelers and responded by saying, “We disagree with Travelers and look forward to arguing our case in court."
- Oaklandish Brand Joins Class Action Suit Against Insurer for Denying COVID-19 Claim
- Asking for Help and Clear Communication Can Aid Businesses During Coronavirus Crisis
- President Signs COVID-19 Relief Bill, Fed Expands Main Street Program
- Post-COVID-19 Market Will Have Place For Indie Retail, Experts Say