Oaklandish Clothing has filed a class action lawsuit against its insurer, Sentinel Insurance Company. The clothing company has challenged its insurer’s denial of loss claims related to COVID-19. Oaklandish is just one of many California business to file similar claims over COVID-19 benefits denial.

Oaklandish Clothing is an Oakland, California-based company that produces Oakland-related apparel.  The company asserts that it experienced significant financial injury due to COVID-19 and the subsequent shutdowns throughout the state.

The Sentinel Insurance Company COVID-19 coverage class action lawsuit explains that the Oaklandish store was forced to close during California’s March stay-at-home order. This allegedly impacted sales and production, putting financial strain on the business. The company explains that still, in-person shopping is prohibited, though the restrictions of the stay-at-home order have loosened.

The company says that it filed a claim for these losses with Sentinel, affiliated with The Hartford Insurance, believing these COVID-19 losses would be covered under their business interruption policy. However, Oaklandish asserts that this claim was wrongly denied, as Sentinel attempted to dodge the effects of COVID-19. 

Sentinel reportedly denied the claims because Oaklandish had interpreted the policy incorrectly. According to Sentinel, the clothing company’s impression that the policy would cover the virus was “based on an unreasonable reading of its policy.”

The company has since filed a class action lawsuit, saying Sentinel has made a practice of dodging COVID-19 benefits claims from a range of businesses. The Oaklandish store asserts that the financial consequences of these denials are significant, and impair a business’s ability to recover from the pandemic. 

Now, Oaklandish clothing has asked the U.S. District Court in the Northern District of California to force the company to pay up, in the amount of at least $5 million but possibly more, explains The Mercury News.

Oaklandish Clothing explains that they and many other businesses have business loss insurance precisely to protect against unforeseen financial injury, like that which resulted from the coronavirus pandemic.

According to the COVID-19 business insurance denial class action lawsuit, the Oaklandish store and other businesses would not have paid for their policies, or would not have paid as much as they did for them, if they had known that the policies did not cover the promised damages.

The Sentinel Insurance Company COVID-19 class action lawsuit explains that Oaklandish clothing and other businesses took out a policy with Sentinel that insured their businesses “not just for tangible damage to their premises and equipment.” Allegedly, they reasonably believed that the coverage would insure them against unavoidable business interruptions caused by no fault of their own.

Oaklandish goes into more detail, explaining that the company purchased “comprehensive commercial liability and property insurance.” This policy supposedly covers business income fro the losses sustained, and covers additional “civil authority” coverage. 

However, after the company filed a claim, they were told that their claim was denied because COVID-19 “did not cause property damage at your place of business or in the immediate area, this business income loss is not covered.” According to Oaklandish, the insurer went on to inform that “even if COVID-19 did cause damage, it is excluded from the policy.”

Oaklandish disagrees, stressing that the terms and inclusions of the policy are broad, while the few exceptions to coverage are narrowly defined. The clothing company asserts that nowhere in the policy is there an exception for instances like COVID-19. 

In a statement regarding COVID-19 denials, Sentinel doubled down on the insistence that COVID-19 losses are not covered under its insurance policies. The Mercury News quotes Matthew Sturdevant, a spokesperson for The Hartford, as saying: “Tragically, millions of businesses across the country have closed their doors because of government-ordered shutdowns. Unfortunately, viruses are generally outside the scope of business interruption coverage. These policies do not cover this exposure and, accordingly, premiums were never collected for it.”

However, Oakland asserts that they did pay premiums for this kind of coverage — thousands of dollars, they claim. In their eyes, the insurer knows that COVID-19 losses should be covered, but is now trying to weasel out of this responsibility in the interest of protecting its profits.

Have you been denied coverage for COVID-19 losses from your insurer? Tell us in the comments below.

Oaklandish is represented by Eric H. Gibbs, Michael Schrag, Andre M. Mura, Karen Barth Menzies, Amy M. Zeman, and Steve Lopez of Gibbs Law Group LLP; and by Andrew N. Friedman, Victoria S. Nugent, Julie Selesnick, Geoffrey Graber, Eric Kafka, and Karina G. Puttieva of Cohen Milstein Sellers & Toll PLLC.

The Oaklandish Clothing Sentinel Insurance Company Class Action Lawsuit is Oaklandish LLC v. Sentinel Insurance Company LTD, Case No. 3:20-cv-04856, in the U.S. District Court for the Northern District of California. 

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