The Gardener has operated on Fourth Street for 36 years. Photo: The Gardener

The Gardener, the garden and home store that has anchored the Fourth Street shopping district for 36 years, has filed a lawsuit against its insurance company for not honoring its business interruption coverage.

Alta Tingle, who founded and owns The Gardener, filed the claim against the Ohio Security Insurance Company after “facing serious financial harm” because of the closure of her stores in Berkeley, San Francisco and Healdsburg. Tingle, like almost every other retailer, was forced to close her stores after local cities and Gov. Gavin Newsom issued shelter-in-place orders to stop the spread of COVID-19.

The insurance company, which is affiliated with Liberty Mutual Insurance Company, denied The Gardener’s business interruption claim, according to the lawsuit filed Tuesday in federal court.

“That leaves The Gardener in financial straits — precisely the situation it sought to avoid when it obtained coverage for business interruptions,” according to the lawsuit.

Tingle said she thought business interruption insurance would cover a business downturn due to conditions out of her control.

“East Bay residents, local artisans, and our employees have relied on The Gardener being a key part of Fourth Street and the greater Berkeley economy since we first opened in 1984,” Tingle said in a statement. “We thought that by purchasing business interruption insurance from Ohio Security Insurance Company that they would help us navigate difficult situations like the current crisis. Now we expect Ohio Security Insurance Company to hold up their end of the bargain and ensure that The Gardener can continue to be a vital part of our community.”

While the lawsuit did not specify why The Gardener’s claim was denied, insurance companies around the U.S. have been insisting that business interruption coverage is only paid when there is physical damage to the store or its contents, said Amy Zeman of the Gibbs Law Group, which filed the class-action lawsuit for The Gardener. Many insurance policies, including The Gardener’s, also have a “virus exclusion,” clause, meaning no funds need to be paid when a virus is responsible for the decline of a business. These clauses were inserted years ago after there were outbreaks of the SARS virus and the H1N1 flu, she said.

The Gardener’s lawsuit contends that the coronavirus is not the reason the three stores had to shut down; Gov. Gavin Newsom’s March 19 shelter-in-place order is. Therefore, the Ohio Security Insurance Company should pay.

At least one other business – a barbershop in Florida — has filed a suit against Ohio Security Insurance Company, which Zeman said is affiliated with Liberty Mutual Insurance Company. People in the insurance industry said these kinds of claims are growing, but the efficacy of the lawsuits is uncertain.

“There have been a lot of disputes and interpretations going on as it surrounds this completely uncharted territory that we’ve entered into around COVID-19 insurance claims,” Scott Friedson, CEO of Insurance Claim Recovery Support told industry leaders in a webinar put on by REJournals.

The French Laundry, the famed Napa restaurant owned by Thomas Keller, filed a lawsuit against its insurer for not paying claims for business losses. The In-And-Out burger chain is also suing its insurer.

Gibbs Law Group and the Washington, D.C.-based Cohen Milstein Sellers and Toll PLLC are representing a handful of other businesses, both retail stores and restaurants, in California that have filed suits against various insurance companies that have denied them business interruption insurance, said Zeman. Many are filed as class-action lawsuits.

“These business owners did what they were supposed to do to look out for their businesses,” said Zeman. “They thought they had protections in place and to be told ‘no, what you paid for won’t come through’ and the insurance company won’t stand up to its part of the bargain is really frustrating.”

Berkeleyside’s call into Liberty Mutual Insurance Company had not been returned by publication time.

Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California, published in November...