A Pasadena hotel filed a class action lawsuit this week against its insurer in an attempt to recover losses sustained during the COVID-19 pandemic, according to court documents.
Park Place Master Tenant LLC, which operated Hotel Constance in Pasadena, filed the litigation against Zurich American Insurance Co. and Zurich North America on Wednesday in federal court in Illinois.
The case revolves around a clause in the insurance contract that excludes the insurer from “any virus, bacterium or other micro-organism that induces or is capable of inducing physical distress, illness or disease,” according to the filing.
Zurich has denied claims to reimburse losses suffered by the hotel during the pandemic, citing the clause, according to the lawsuit.
But hotel representatives maintain that it was largely government shutdown orders that caused the losses, not the virus itself.
“As a result of the orders, guidance and protocols issued by the Governor of California, the County of Los Angeles Department of Public Health, [Pasadena Public] Health Officer [Ying-Ying] Goh, and the CDC (collectively the “Mandated Shutdown Rules”20), the Hotel received a significant number of Hotel reservation cancellations, and effectively closed on March 16, 2020 in order to prevent the gathering of 10 or more people and stop the spread of COVID-19,” the lawsuit contends.
The hotel said it filed a claim for loss of business income on April 2, but the claim was “effectively denied” by Zurich on April 30, citing the contract’s “Virus Exclusion.”
“…to the extent that the governmental orders, in and of themselves, constitute direct physical loss of or damage to Plaintiff’s Covered Properties, the Virus Exclusion simply does not apply,” the hotel contends.
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May 16, 2021 at 07:45PM
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