Burlington said Tuesday that Zurich American Insurance Co. has been unresponsive after it filed a $750 million claim in March and that it never sent an adjuster to properly investigate its insurance loss claim as required by the policy.
"Burlington was not immune from the coronavirus pandemic, with many of its associates reporting cases of COVID-19," it said.
Burlington Stores Inc. owns 780 stores in 45 states and Puerto Rico. The department store giant said Tuesday that its pandemic losses are covered because its Zurich Edge all-risk policy promised policyholders "broader coverage, and greater flexibility."
The policy's contamination exclusion does not include "virus" as an excluded cause of loss, so Zurich cannot refuse to offer coverage by asserting the exclusion, Burlington said. It also alleged Zurich specifically removed "virus" from the policy's contamination exclusion through a "virus deletion endorsement" when it issued the Edge policy.
In the complaint, the apparel retailer said it suffered over $750 million in losses after it was forced to shut down stores last year due to government closure orders. It is seeking a declaration that the losses are covered under the Zurich Edge all-risk policy and demanding damages in a jury trial.
It claimed the coronavirus was physically attached to its stores' facilities and can stay on a property's surface for days, causing damage. The retailer said it has incurred business losses and physical damage from cleaning and disinfecting surfaces and rearranging space to ensure social distancing when it was allowed to reopen last summer.
Zurich has been slammed with policyholder lawsuits alleging hundreds of millions of dollars of pandemic-related losses under its Zurich Edge policies. Earlier this month, the owner of LA fitness combined two pandemic loss suits into one $950 million matter against insurers including Zurich in Washington state court.
In April, a Florida restaurant chain urged the Eleventh Circuit to revive its virus loss suit, saying its Zurich Edge policy doesn't require policyholders to go through a "period of restoration" to show property repairs. Lindenwood Female College of Saint Charles, Missouri, has also urged the court to honor its $100 million Zurich Edge policy.
In March, the Capri Holdings Ltd., which owns Versace, Jimmy Choo and Michael Kors, said its insurers, including Zurich, owed coverage for more than $1.2 billion in pandemic losses. Also in March, Carilion Clinic and its affiliated hospitals in Virginia, West Virginia, Tennessee and North Carolina asked Zurich to cover its more than $150 million in pandemic losses under its $1.3 billion Zurich Edge policy after more than 1,300 of its employees were diagnosed with COVID-19.
The owner of Motor City Casino Hotel has also claimed its Zurich affiliate insurer owes it $270 million for COVID-19-related losses. And in late February, over a dozen health care service companies told an Illinois federal judge that Zurich must cover their pandemic-related losses.
Representatives for the parties could not be immediately reached for comment Thursday.
Burlington is represented by Lee M. Epstein, John G. Koch and Matthew A. Goldstein of Flaster Greenberg PC.
Counsel information for Zurich is not immediately available.
The case is Burlington Stores, Inc. v. Zurich American Insurance Co., case number 001053-21, in the Superior Court of New Jersey, County of Burlington.
--Editing by Gemma Horowitz.
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