April 29 (Reuters) - A prominent Los Angeles nonprofit that advocates for human rights and fights anti-Semitism sued Chubb Ltd on Wednesday to ensure it will obtain insurance coverage after being forced to close because of the COVID-19 pandemic.
The Simon Wiesenthal Center said Los Angeles Mayor Eric Garcetti's March 19 stay-at-home order effectively cut off its ability to generate income, and entitled it to "business interruption" coverage under its August 2019 Chubb policy.
Among the events affected were a tribute dinner honoring the actor George Clooney and his wife Amal, an address by U.S. Secretary of State Mike Pompeo at the center's Museum of Tolerance, and several fundraisers.
Chubb said in a statement that it does not comment on client claims or pending litigation.
The lawsuit shows how nonprofits can be drawn into the battle over pandemic coverage facing the property-casualty insurance industry, which has a roughly $750 billion to $800 billion surplus, or assets minus liabilities.
Many lawsuits have already been filed by restaurants, bars and other businesses not deemed "essential" by state and local authorities or where social distancing can be hard to enforce.
Business insurance policies often contain exclusions for losses caused by viruses, a change made after the SARS outbreak that peaked in 2003, and are priced accordingly.
But the Wiesenthal Center said insurance policies "are not one size fits all."
It said Zurich, Switzerland-based Chubb owed coverage because its policy covered "physical" property loss and damage, which COVID-19 can cause because it can attach to surfaces.
The center also said while its policy excluded coverage for damage from "pollutants" such as "smoke, vapor, soot, fibers, fumes, acids, alkalis, chemicals, and waste," viruses were not listed as pollutants.
On an April 22 conference call, Chubb Chief Executive Evan Greenberg said business interruption insurance "doesn't cover COVID-19," and instead requires direct physical loss to property.
"Lawyers and the trial bar will attempt to torture the language on standard industry forms and try to prove something exists that actually doesn't exist," he said. "The industry will fight this tooth and nail. We will pay what we owe."
The Wiesenthal Center's lawyer, John Houghtaling, filed a similar lawsuit on March 25 against Hartford Fire Insurance Co on behalf of Thomas Keller, the owner of The French Laundry, a three-Michelin-starred restaurant in California's Napa Valley.
Houghtaling did not immediately respond to a request for comment.
The center also has offices in New York, Chicago, Miami, Toronto, Paris, Buenos Aires and Jerusalem.
The case is Simon Wiesenthal center Inc v. Chubb Group of Insurance Cos et al, U.S. District Court, Central District of California, No. 20-03890. (Reporting by Jonathan Stempel in New York; Additional reporting by Suzanne Barlyn in Washington Crossing, Pennsylvania; editing by Jonathan Oatis)