The insurer argues that virus-related losses are excluded from business interruption policies issued to the firm and that even without the exclusion coverage would still be denied because the virus did not cause physical damage.
In Travelers Casualty Insurance Co. of America v. Geragos & Geragos, filed in U.S. District Court for the Central District of California in Los Angeles, Travelers seeks a declaratory judgment under two business owners policies it issued to the law firm, court papers say.
Geragos & Geragos and its managing partner Mark J. Geragos, a well-known criminal defense and civil litigation lawyer, on April 9 sued Travelers, asserting that the presence of the coronavirus on or around property constituted physical damage under the civil authority section of their policies triggering coverage.
In its lawsuit, Travelers argues that the policies have specific exclusions stating that losses resulting from a virus or a bacteria are not covered.
“Even without reference to their exclusions, the Policies require ‘direct physical loss or damage’ to property, and the presence or suspected presence of a virus does not constitute the requisite ‘direct physical loss or damage,’” the suit says.
The Travelers suit comes after dozens of policyholders across the country have sued their insurers seeking coverage to losses for lost income amid the COVID-19 pandemic.
In a statement responding to the Travelers suit, Mr. Geragos said: "We welcome the opportunity to fight on behalf of small businesses against rank corporate greed and their legal enablers."