Tuscaloosa Business Files Lawsuit Over Denied COVID-19 Insurance Claim
A small business in Tuscaloosa has filed a lawsuit after their insurance provider denied a claim that would have covered losses caused by the COVID-19 pandemic and the retail shutdown it has necessitated.
In a lawsuit filed last Tuesday, Wagner Shoes, LLC., asserted that as a business deemed nonessential, Wagner's Shoes for Kids was ordered to close by Tuscaloosa Mayor Walt Maddox on March 26th and then again by the state of Alabama on the next day.
Because their "very economic survival is dependent of engaging and selling to local customers physically present in its store," Wagner's filed an insurance claim with Auto-Owners Insurance Company, through whom the company holds a Businessowner's Policy and a Commercial Umbrella Insurance Policy.
Wagners communicated with Auto-Owners through the Fitts Agency, Inc., a local insurance broker, and was allegedly told that there was no coverage for loss of income caused by the COVID-19 pandemic, but was invited to pursue the matter and file a proof of loss form to get the proverbial ball rolling.
According to the lawsuit, Wagner's received the proof of loss form on April 6th and their claim was denied on the same day, before the small business could complete and file the form.
In the lawsuit, Wagner's asks for a declaratory judgment requiring Auto-Owner's to pay the shoe store for the full amount of losses incurred because of the shutdown. The lawsuit also includes alleges breach of contract, bad faith behavior, institutional bad faith and negligence or wantonness, and asks for a jury trial to assess additional judgment against the insurance company for each of the four counts.
The case was filed by R. Matt Glover of Tuscaloosa's Prince, Glover Hayes law firm and P. Ted Colquett of Colquett Law, LLC in Birmingham. It is the first lawsuit of which we are aware filed in response to the shutdown of nonessential businesses during this pandemic, but almost certainly not the last.
Stay tuned to this site and station for more information on the case as it develops.
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