First Houston-Area Lawsuit Filed Over COVID-19 Business Interruption Losses
Time 2 Minute Read

A Houston-area wig store filed the first Texas COVID-19 lawsuit concerning business interruption losses Thursday in a state court in Harris County. The plaintiff, Barbara Lane Snowden DBA Hair Goals Club, filed suit, a copy of which can be found here, against Twin City Fire Insurance Company, a Hartford Insurance company. The lawsuit alleges that plaintiff has sustained and will continue to sustain covered losses during the COVID-19 outbreak and subsequent Harris County Stay Home Order. The lawsuit further alleges that plaintiff already sought coverage for its business interruption costs under the Twin City policy, but that claim was denied. Accordingly, plaintiff has alleged breach of contract, unfair settlement practices, violation of the Prompt Pay Act, and breach of the duty of good faith and fair dealing for Twin City’s wrongful denial of the claim.

This lawsuit has three practical implications. First, the wave of COVID-19 business interruption claims has only just begun – these claims will soon become the new normal in Texas, where Stay Home Orders have only recently begun to be issued but are having wide-ranging and significant impacts on local businesses.  Second, insurance companies are responding to COVID-19 insurance claims, so it is important for policyholders to take prompt action to notify insurers in the event a claim arises.  Finally, while the lawsuit does not reference the specific insurance policy language at issue or Twin City’s basis for denying the claim, the seemingly quick denial of coverage is evidence that insurance companies will readily deny COVID-19-related claims with little investigation. As we previously explained here, insurers have been vocal against the insurability of resulting financial loss under policies affording business interruption coverage. It is imperative, therefore, that policyholders engage experienced coverage counsel to review their policies and their specific circumstances.

  • Partner

    Mike is a Legal 500 and Chambers USA-ranked lawyer with more than 25 years of experience litigating insurance disputes and advising clients on insurance coverage matters.

    Mike Levine is a partner in the firm’s Washington, DC ...

  • Partner

    A nationally recognized insurance coverage litigator, Lorie handles all aspects of complex, commercial litigation and arbitration for policyholders. Chambers-ranked and recognized as a “top 10 Super Lawyer,” Lorie has ...

  • Associate

    Leah is an experienced trial lawyer in the Litigation section of the Firm’s Houston office. Leah’s practice includes complex commercial litigation, with an emphasis on energy litigation, landlord/tenant litigation ...


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