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Law360 (March 3, 2021, 4:22 PM EST ) A Seattle-area cryotherapy clinic has slapped Evanston Insurance Co. with a proposed class action alleging that the carrier breached the insurance contract by wrongfully and systematically denying all policyholders' claims for pandemic-related coverage.
In a suit filed Tuesday in Washington federal court, Glacial Cryotherapy LLC said its covered property suffered a direct physical loss from not being able to function as intended due to government closure orders. The business alleged that Evanston verbally denied coverage over the phone last March and never provided a written claim denial as promised.
Glacial said that Evanston has issued blanket denials to all insureds seeking COVID-19 shutdown coverage under their all-risk policies, despite a growing number of courts finding for coverage for alleged losses. The clinic is asking the court to hold that its properties' "direct physical loss of use" is covered under the policy.
"Defendant's across-the-board coverage denials are not consistent with its policy language and with its obligations to investigate losses arising under its policies," it said in the complaint.
The King County-based clinic provides cryotherapy treatment, light therapy and infrared sauna therapy to customers, according to the suit.
The clinic said it complied with government closure orders to suspend business and prohibit customers and employees from entering its premises to receive and perform treatments last March. Its insured properties — including the cryotherapy machines and a whole-body cryotherapy chamber, sauna and treatment beds — all lost their intended function as government orders forbid it to provide in-person and on-site treatments to customers, according to the complaint.
Glacial is looking to represent a national class and a Washington state subclass of all policyholders who have been denied business income coverage during the pandemic.
It is seeking a declaration that the proposed class members' losses are covered under Evanston's policies and the insurer is fully responsible to pay for all the claims. Further, it is demanding damages to be determined in a jury trial.
Representatives for the parties could not be immediately reached for comment Wednesday.
Glacial Cryotherapy is represented by Amy Williams-Derry, Lynn L. Sarko, Ian S. Birk, Gretchen Freeman Cappio, Irene M. Hecht, Nathan Nanfelt, Gabriel E. Verdugo and Alison Chase of Keller Rohrback LLP.
Counsel information for Evanston was not immediately available.
The case is Glacial Cryotherapy LLC v. Evanston Insurance Co., case number 2:21-cv-00266, in the U.S. District Court for the Western District of Washington.
--Editing by Andrew Cohen.
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