Legal Sea Foods alleges insurer wrongly rejected pandemic claim

May 5--Legal Sea Foods' insurer gave the company a policy without pandemic or virus coverage in March as COVID-19 hurt economies worldwide, Legal claims in a federal lawsuit filed Monday evening.

In denying Legal Sea Foods' claim for a pandemic shutdown-related loss, Strathmore Insurance Company failed to apply its own policy language and conducted an inadequate investigation, attorney Michael Levine for Legal wrote in the suit filed in U.S. District Court.

"In other words, Strathmore had the opportunity to use standard insurance industry forms or language to specifically exclude virus losses like those resulting from COVID-19 from coverage, but it chose not to do so," Levine wrote.

Legal, with 34 locations across the East Coast and approximately 3,100 workers in Massachusetts alone, entered the policy on March 1, months after Starthmore had knowledge of the coronavirus spreading across Europe and China, the suit alleges.

Gov. Charlie Baker's shutdown order in March permitted restaurants to transition to carryout and delivery services, which wasn't an option for the seafood chain, Levine wrote.

Legal alleges Strathmore rejected Legal's claim of loss amid pandemic closures three days after their initial claim was filed March 23, and rejected it again last month.

The policy is subject to a blanket limit of $94,852,397, the suit states.

Legal and Starthmore were unavailable for comment Monday evening. Levine told the Herald Monday evening the lawsuit appears to be the first pandemic-related insurance suit filed in Massachusetts.

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