Insurance company's suit says it has no duty to cover Geragos firm’s COVID-19 business losses
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Travelers Casualty Insurance Co. of America has filed a lawsuit against Geragos & Geragos that contends that it has no duty to cover the high-profile law firm’s COVID-19-related business losses.
The lawsuit, filed Monday in Los Angeles federal court, cites an exclusion for loss because of viruses or bacteria, report Law360, Insurance Business and the Hollywood Reporter.
Even without the exclusion, the policies would not cover the law firm’s losses because they require “direct physical loss or damage,” the suit says.
The suit seeks a declaratory judgment that Travelers Casualty Insurance has no duty to cover the law firm under either of two policies that it purchased. The action follows state court lawsuits filed against Travelers Casualty Insurance by Geragos & Geragos that contend that the insurer has wrongfully denied coverage to the law firm and several businesses.
Geragos & Geragos had contended that there was physical damage because the novel coronavirus is detectable in aerosols and on certain surfaces for particular periods of time.
The lawsuit says the policy does cover losses from civil authority orders but only if the order is due to direct damage to property at locations “that are within 100 miles of the described premises.” Loss of access to the courts from governmental action is not a physical loss, according to the suit.
Mark Geragos, managing partner at Geragos & Geragos, issued a statement to Law360 and Business Insurance.
“Travelers Insurance, after cashing our premium checks for years, decided yesterday that instead of paying our business interruption claim that they would hire a large law firm to sue us in federal court instead,” the statement said. “Apparently, their way of adapting to a pandemic is filing lawsuits against their own insured. We welcome the opportunity to fight on behalf of small business against rank corporate greed and their legal enablers.”
Geragos, a criminal defense lawyer, has represented celebrity clients such as Chris Brown and Michael Jackson.
Travelers Casualty Insurance is represented by Gibson, Dunn & Crutcher and Robinson & Cole.
