A real estate agency that manages shopping centers throughout California and in other states is suing Lloyd’s of London, alleging the insurer is wrongfully refusing to pay full business interruption coverage for claims submitted after the outbreak of the coronavirus.
Woodland Hills-based NewMark Merrill Companies Inc. brought the breach-of-contract complaint Tuesday in Los Angeles Superior Court, seeking unspecified compensatory and punitive damages. A Lloyd’s of London representative could not be immediately reached for comment.
Due to the pandemic, NewMark Merrill has lost leasing, management and development fees as well as profit sharing from the shopping centers, according to the suit.
NewMark Merrill submitted a claim for damages through OneSource Claims Management in Woodland Hills in April, a month when the combined loss of rent money alone was $5.6 million, according to the suit.
On Oct. 1, nearly six months after the notice of loss was submitted, OneSource sent a letter to NewMark Merrill denying the business interruption claims except for the related contagious disease coverage, which has yet to be paid, according to the suit.
In their denial letter, OneSource said that there had to be “some tangible or detectable change to the insured property” for the claims to be approved, the suit states.
NewMark Merrill maintains Lloyd’s, through OneSource, is “unreasonably attempting to rewrite the policy to support their interpretation to deny coverage.”