Nordstrom claims its stores suffered extensive damage during last year’s protests of police violence against Black people and its insurance company is attempting to escape coverage of the related costs.
Although mostly peaceful, several weeks of protests stemming from the May 2020 police killing of George Floyd, preceded by the deaths of several other Black men and women at the hands of police, coincided with some property damage and theft. Civil rights groups like Black Lives Matter and the NAACP roundly criticized and rejected these acts as having any affiliation with their cause.
Nordstrom admitted in a complaint filed Friday in federal court that only a “small percentage” of the protests “turned violent,” but it was enough that the entirety of its chain of 100 department stores suffered damage, directly through theft or indirectly through business interruption. It closed all of its stores for a time, boarding them up and hiring security for some, leaving it with an insurance claim of $25 million.
“It is undisputed that Nordstrom’s property insurance policies cover the loss,” the retailer wrote in its complaint.
The issue is that its insurers, a collective of five companies, including AIG, Continental and Ironshore, are attempting to avoid coverage by defining each instance of store damage or business interruption as an individual event, instead of a “single occurrence.” This allegedly leaves the cost of damages within the reach of Nordstrom’s “$1 million per occurrence” insurance deductible, meaning no insurance payout on its large single claim.
Nordstrom is not the only fashion player to be fighting with insurers. Ralph Lauren Corp. is suing its insurers for $700 million for refusing to cover costs related to losses amid the coronavirus pandemic. But Nordstrom appears to be among the first to sue in relation to coverage from last year’s protests.
Nordstrom called its insurers’ move “a transparent effort” to avoid payment of its $25 million claim. It added that the insurers’ position that the summer protests did not cause “a series of losses…attributable directly or indirectly to one cause” goes against the language of the insurance contract.
“This position ignores the broad batching effect of the policy language and the interrelated nature of the events that caused Nordstrom’s loss,” the retailer wrote.
Nordstrom is asking the court to declare the summer protests and related “civil unrest” count as a “single occurrence” under its insurance policies, along with breach of contract on the part of the insurers and coverage of legal expenses required to litigate its claims.
Representatives of the insurers could not be reached for comment. A representative of Nordstrom could not be reached for further comment.
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