Preschool Says Insurer Failed To Investigate COVID-19 Claim

By Mike Curley
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Insurance newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!

Law360 (October 14, 2020, 5:41 PM EDT) -- A California preschool is suing Markel Insurance Co. over its denial of the school's COVID-19 business interruption claim, saying the insurer didn't investigate properly and the denial "distorts" information from the claim.

In a complaint filed in September but removed to the Southern District of California on Tuesday, Baldwin Academy Inc. said that it shut down operations on March 16, after finding out that a parent of one student had tested positive for the disease.

According to the complaint, the parent notified Baldwin Academy that she had contracted the disease during a recent trip to Colorado, and had then repeatedly visited the school's campus in the week before its closing to pick up and drop off her child. During those visits, the parent came into contact with other parents, faculty, and pieces of equipment such as touchpads, door handles and other items, the academy said.

Within the week, the academy put in a claim to Markel and responded to the insurer's request for information, but was denied coverage in a letter dated April 20, which the preschool says "materially distorts" the information it sent to Markel.

The complaint lists several instances of alleged inaccuracies in the denial letter, such as Markel stating that Baldwin Academy didn't show the parent had been at the campus after returning from Colorado, despite Baldwin providing the parent's email alerting them to her diagnosis, and offering to provide the insurer with her name if the information remained confidential.

Markel's letter also allegedly stated that Baldwin Academy didn't receive orders or recommendations from health departments to shut down, despite the preschool citing executive orders mandating nonessential services close, according to the complaint.

The preschool also disputed Markel's assertion that the virus did not cause "direct physical loss or damage," saying the policy does not require proof of physical damage. Baldwin Academy further argued that a communicable disease endorsement overrides the bacteria and virus exclusion in its policy.

According to the complaint, Markel refused to do any further investigation and repeatedly affirmed the denial based on the "misleading, inaccurate and/or false statements" of the April letter.

The suit brings claims for breach of contract and breach of implied covenant of good faith and fair dealing, and seeks a declaration that Markel owes coverage for the school's business losses, as well as other unspecified damages.

Representatives for the preschool and Markel could not immediately be reached for comment Wednesday.

Baldwin Academy is represented by Laleaque Grad of The Grad Law Firm.

Markel is represented by Bennett Evan Cooper of Dickinson Wright PLLC.

The case is Baldwin Academy Inc. et al. v. Markel Insurance Company et al., case number 3:20-cv-02004, in the U.S. District Court for the Southern District of California.

--Editing by Alyssa Miller.

Correction: An earlier version of the story misidentified the law firm for Markel's counsel. The error has been corrected.

For a reprint of this article, please contact

Attached Documents

Useful Tools & Links

Related Sections

Case Information

Case Title

Baldwin Academy, Inc. et al v. Markel Insurance Company et al

Case Number



California Southern

Nature of Suit



Marilyn L. Huff

Date Filed

October 13, 2020

Law Firms

Government Agencies

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!