NewsTeam 10 Investigates


San Diego barber: Insurance denied claims for business interruption coverage

Posted at 5:29 PM, May 15, 2020

SAN DIEGO (KGTV) - A San Diego barbershop owner filed a lawsuit against his insurance company for denial of a COVID-19 claim.

According to the lawsuit filed by Pappy's Barber Shop, "Farmers and other insurers are now categorically refusing to pay these legitimate claims for business interruption coverage claims."

Marc Bennet, Pappy's owner, said he filed a claim a day or so after closing his doors due to the county's stay at home order to prevent the spread of the virus.

"I'm trying to take advantage of the time with my family and kids, but as a business owner, your business is on your mind 100% of the time," he said.

Bennet said a few days after filing the claim, he was informed it was denied.

Now, nine weeks with no revenue, he filed a class-action lawsuit against the insurance company.

"Under the policy, he should be entitled to business income and extra expenses," said attorney Amber Eck.

According to the lawsuit, "Despite the provision of business interruption coverage in these policies, Farmers is denying its obligation to pay for business income losses and other covered expenses incurred by policyholders for the physical loss and damage to the insureds' property arising from the COVID-19 Civil Authority Orders."

The lawsuit claims, "Farmers' categorical treatment, failure to investigate in good faith, and denial of Plaintiffs' and the Class members' claims appears to be part of a broader strategy being employed by the insurance industry generally, to broadly deny claims for business interruption coverage related to the Coronavirus pandemic, as has been widely reported by the media and resulted in numerous lawsuits brought by businesses against property insurance companies throughout the country."

"These are policyholders like Marc that have been paying their premiums for year after year after year, so if something like this happened, they can get the benefit of having this insurance," Eck said,

In a statement, a spokesperson for Farmers Insurance tells 10News, "Farmers understands the impact of COVID-19 has been difficult for communities and local businesses across the country. Out of fairness to all policyholders, our obligation is to pay those claims covered under our policies and to apply policy exclusions where they exist. In this circumstance, the claim for COVID-19 related damages, including those resulting from governmental stay-at-home orders is not covered under the policy and is subject to applicable policy exclusions."

Marc Bennet says the insurance money is vital in being able to give his employees at least something.

"Just the fact that I could continue to pay them (employees) something at least," he said. "Even if it wasn't what they would normally make, I could at least pay them something."