Houston Rodeo slaps insurer with lawsuit over BI claim denial

Houston Rodeo slaps insurer with lawsuit over BI claim denial

Rodeo incurred business losses from its early shut down in March due to the coronavirus pandemic.

In an interview with KHOU, Seth Chandler, law foundation professor at the University of Houston Law Center said he was not sure if “either side has a slam dunk argument.”

He said the key requirement that triggers coverage under most business interruption policies is “actual physical loss and damage to property.”

“From the insurance company’s perspective, the fact that there’s a virus lurking on your property, or could be, is not a physical loss, it’s not a fire or tornado,” Chandler said.

However, Rodeo officials argued in the lawsuit that the COVID-19 shutdown was equivalent to a “property having lost its roof to a tornado, hurricane or fire,” which resulted in the business losing millions of dollars in income.

Chandler said similar lawsuits have been filed across the country and many judges have ruled in favor of the insurance providers.

“Most of the courts that have looked at this so far, have ruled that having a virus on your property isn’t physical damage,” he said.

However, Chandler said he doesn’t expect either side to give in easily, especially with millions of dollars at stake.

Rodeo officials said they hope to resolve the issue soon, in a statement obtained by KHOU.

Meanwhile, a spokesman for Hallmark told KHOU that the company does not discuss individual claims about customers but pointed out that Hallmark was just one of a panel of insurers that collectively provides coverage under the Rodeo’s policy.