Coronavirus Impact: San Francisco retailer files COVID-19 class action lawsuit against insurance company

SAN FRANCISCO (KGO) -- A San Francisco boutique has filed a class action lawsuit against insurance company Travelers for failing to pay business interruption claims related to COVID-19.

Children's boutique and gift shop Mudpie is a longtime family run business. Manager Sarah Perliss says the brick and mortar store had to quickly pivot to online and curbside options in light of COVID-19.

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"It's impacted us drastically the sales are nothing like what our daily sales were," said Perliss.

Perliss says she's trying to stay positive.

"It's my livelihood, it's a very creative outlet and it's my passion," she explained. According to a class action lawsuit, Mudpie purchased comprehensive commercial liability and property insurance from Travelers to insure against risks the business might face.

Perliss filed a claim with Travelers for the interruption to her business, but it was denied.

A Travelers spokesperson tells ABC7 News it is committed to paying covered claims, but cannot pay for losses a policy expressly excludes.

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Writing in an emailed statement, spokesperson said "In our standard commercial property policies that include business interruption coverage, we have very specific exclusions stating that losses resulting from a virus or bacteria are not covered."

Amy Zeman is Perliss' attorney.

"We fundamentally disagree that that exclusion applies. The business interruption here is occurring due to the government shutdown orders," said Zeman.

Zeman says she is hearing from small businesses across the country who are being impacted by the shutdowns.

Given that litigation like this could take a while, she recognizes some businesses may have to permanently close in the meantime.

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It's an outcome Perliss doesn't want to consider.

"I would just like to see the insurance company step up and do what's right," she said.

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