For more than 60 years, Wagner's Shoes has been a Tuscaloosa staple. Like many businesses across the State of Alabama, things have dramatically changed due to the COVID-19 Pandemic.
Back in late March, Tuscaloosa Mayor Walt Maddox issued a closure order of all non-essential businesses in the city. Governor Kay Ivey handed down a similar order the following day. It was at that time the business filed a claim for business interruption insurance with their insurer, Auto-Owners Insurance.
Tuscaloosa attorney Matt Glover and Birmingham attorney Ted Colquett are representing the business. Colquett says the claim that was filed was denied. He says they initially filed a Declaratory Judgment Action to ask the court if they had coverage under the policy. He says the same day they filed that action, they learned the claim was denied. From that point, Colquett says they amended their claim to bring forward allegations of breach of contract, bad faith and institutional bad faith.
Colquett says their issue is that the claim was never investigated. He says the first duty of the insurance company is to investigate the claim, especially if it is an all-risk policy.
"If you take Wagner's Shoes and any small business of the kind, it is going to be devastating if insurance companies and the government does not or do not step up to do the right thing," Colquett said. "If we don't help small businesses through their business interruption coverage, income, expense, that recovery will never ever begin."
In light of COVID-19, many insurance companies have posted on their pages in regards to business interruption coverage. Many of them saying that the insurance covers the business when there is a loss due to things like a fire, hurricane, etc, but it does not account for a virus.
Colquett says he and Glover are looking now and anticipate filing additional cases.
"A lot of people will look at it as an opportunity for lawyers," Colquett said. "It's not an opportunity for lawyers. It's an opportunity for an industry to do what it needs to do in this pandemic, or their insurance will suffer."