May 18, 2020


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The owners of Albany venue Ivy Room believe their business interruption insurance should cover them during the pandemic. They hope other California music venues will join their fight against First Mercury Insurance, which categorically denied their claims. (The Ivy Room)

Since taking over the Ivy Room in 2015, Lani Torres and Summer Gerbing have prided themselves on doing everything right. Transforming the venerable Albany dive bar into one of the East Bay’s liveliest music venues, they cultivated a devoted clientele with an exuberantly eclectic roster of acts. They’ve covered their bills, paid the artists who drew throngs to the intimate club and kept up insurance payments in case anything went wrong.

So when the spread of COVID-19 led to the Bay Area’s March 17 shelter-in-place order and the Ivy Room shut its doors, they figured their business interruption insurance would help the club weather the storm. But their insurer, First Mercury, denied their claim, putting the Ivy Room in the same boat as hundreds of other venues that have filed claims with their insurers. Last Wednesday, the owners struck back, filing a class action lawsuit on behalf of California-based music venues insured by First Mercury.

Despite collecting premiums for such risks, First Mercury is “categorically denying claims from venues arising from California’s mandated interruption of business services,” according to a complaint filed by Oakland-based Gibbs Law Group and Washington D.C. firm Cohen Milstein Sellers & Toll PLLC. Rather than investigating individual claims, First Mercury has responded with form letters denying coverage that, the suit argues, “appear to rest on crabbed readings of coverage language and overbroad readings of exclusions. That gets insurance law exactly backwards—and raises the specter of bad-faith denials.”

The complete article can be accessed here.