May 13, 2020

Mudpie, a 44-year-old boutique for children’s clothing, toys and accessories in San Francisco, scaled back its commerce earlier this year when non-essential businesses were required to shutter to prevent the spread of COVID-19. It recently reopened for curbside pickup service and has continued to run its ecommerce shop

The mother-and-daughter team of owners Cheryl and Sarah Perliss thought that the store’s business-interruption insurance would help support them during the crisis. But their claim with Travelers Casualty Insurance Company of America was denied, according to a statement from the boutique’s lawyers.

On May 11, Mudpie, Inc. filed a class action lawsuit on behalf of California’s retail stores. The suit alleges that small businesses have been wrongfully denied coverage for losses resulting from following government-mandated guidelines and closing shops to help prevent the spread of COVID-19. Mudpie has been represented by Gibbs Law Group and Cohen Milstein Sellers and Toll PLLC, said Geoffrey Graber, a Cohen Milstein Sellers and Toll partner. He is head of the firm’s COVID-19 Business Interruption Insurance Coverage Task Force.

“Retailers and other small business owners who have paid business-interruption insurance premiums should expect insurers to fulfill the obligations to which they mutually agreed,” Graber said.

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