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South Florida Company Files One of the State’s First Coronavirus-Related Bad Faith Business Interruption Claims


According to a report from the Insurance Journal, a dive shop based in Monroe County, Florida has filed one of the state’s very first bad faith lawsuits over the denial of a COVID-19 business interruption claim. Experts expect that many more similar complaints will be filed in the coming weeks and months. Below, our West Palm Beach business litigation attorneys provide an overview of the lawsuit and we explain one of the key things that policyholders need to know about business interruption insurance and coronavirus-related losses.

The Claim: Insurance Policy Covered ‘Acts of Civil Authority’ 

The plaintiff in this case (the policyholder) is Conch Republic, a dive shop based in the Florida Keys. Conch Republic carried a comprehensive commercial insurance policy that provided coverage for, among other things, business interruption losses.

In its complaint, Conch Republic notes that it filed a business interruption claim in the middle of March. The claim was submitted after Monroe County issued a local public order temporarily suspending non-essential business operations—including Conch Republic.

On March 30th, the insurance company denied the business interruption claim. Conch Republic has now filed a lawsuit arguing that the denial was in bad faith. The South Florida dive shop highlights two main points in its complaint:

  1. Its business interruption insurance covered losses caused by “acts of civil authority”; and
  2. The virus contaminated objects, causing actual physical damage to the business.

In a message to reporters at Insurance Journal, a representative for Conch Republic stated that its business interruption policy did not contain a pandemic-related exclusion. Representatives for the insurance company did not respond to requests for comment.

Business Interruption Insurance and COVID-19: Policy Language Matters

With business interruption coverage, the specific language of the policy is extremely important. Unfortunately, some business interruption policies may not provide coverage for disruptions related to pandemics or viruses. Whether or not coverage will apply depends on the specific language of the policy and the specific reason why the business suffered losses.

For example, in this case, the fact that the business interruption policy states that “acts of civil authority” is one of the primary factors in driving the dispute. The policyholder is connecting its losses to the public health order issues by Monroe County. Other business interruption claims may turn on other matters. South Florida business owners should not assume that they are ineligible to make a business interruption claim. A lawyer can help you understand your rights and options.

Call Our Florida Business Interruption Lawyers for Immediate Help

At Pike & Lustig, LLP, our Florida business law attorneys have the skills and legal knowledge to represent clients in business interruption claims. If your COVID-19 business interruption claim was denied, we are here to help. Call us now for a confidential, no obligation consultation. From our law offices in West Palm Beach and Miami, we represent business law clients throughout the wider region, including in Lake Worth, Riviera Beach, Wellington, Boynton Beach, Parkland, and Boca Raton.




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