Crown Trophy Inc. in Hawthorne is suing its property insurer for $20 million for allegedly denying coverage for damages caused by Covid-19.
Federal Insurance Co. “promised to pay for losses of business income and extra expenses sustained as a result of perils not excluded under the policy,” according to a complaint filed Sept. 1 in Westchester Supreme Court. But Federal Insurance, “without justification” disputes that the policy covers the losses.
A spokesman for Chubb Insurance Group, Federal”™s parent company, did not provide Federal”™s side of the story.
Beginning with a store in Brooklyn in 1978, Crown has grown into the largest retailer in the country of trophies, plaques, medals and other awards, according to its website. It has 150 stores in 40 states, including franchises.
Crown bought property insurance coverage for 2020 for its headquarters, warehouse and equipment facility in Hawthorne.
The trophy maker describes the policy as business interruption coverage “in the event that they suddenly had to suspend operations for reasons outside their control.”
The policy includes extra expenses, Crown claims, for costs incurred from suspension of business operations, including economic and financial losses.
The insurance industry recognizes that a virus or disease can constitute a physical loss or damage to property, according to Crown, and insurers can exclude virus damages from their policies.
Crown”™s deal is an “all-risk” policy, according to the complaint. There are no exclusions.
Chubb knew it could incur risks from a pandemic, Crown claims, citing a U.S. Securities and Exchange Commission report the insurer filed last year. “We have substantial exposure to losses,” the report states, “resulting from ”¦ catastrophic events, including pandemics.”
Crown claims that Covid-19 caused direct physical loss or damages, by denying access to its property, preventing customers and workers from occupying the property and causing a suspension of business operations.
“However, instead of honoring its promises,” the complaint states, “Federal flatly denied covered” and “refused to make any payments.”
Crown is asking the court to declare that Federal must cover the losses and to grant a judgment for current damages of no less than $20 million.
Crown Trophy is represented by Tarrytown attorney Richard B. Feldman.
