A Houston law firm and its landlord sued the firm's insurance company in Connecticut, alleging the insurer improperly denied a claim for lost business income blamed on COVID-19 shutdown orders.

The lawsuit by Kennedy Hodges & Associates and landlord Three Commas are an example of a growing nationwide trend of businesses suing their insurers for denials of COVID-19-related claims. About 65 Florida cases have been filed.

The Houston firm suspended its businesses from March 18 to May 1, which interrupted its normal  business income, according to  the proposed federal class action complaint. The landlord and tenant sued Twin City Fire Insurance Co. and The Hartford Financial Services Group on June 19 in the District of Connecticut.

The proposed class encompasses Hartford's policyholders that closed their businesses because of government COVID-19 orders were rejected for lost business income coverage.

The firm and landlord had an "all-risk" commercial property insurance policy from Hartford and argued it was supposed to cover lost business income for up to 12 months, the complaint said.

The firm and landlord argued they were supposed to be able to recover their lost business income if the premises had either a "direct physical loss of or physical damage" to the property. They had additional coverage in case the "action of civil authority" stopped them from accessing the property.

The complaint noted the Texas and Harris County governments issued orders that required Texans to stay home during the pandemic.

The Hartford denied the claim, said the complaint, writing in a denial letter that the losses did not come from a physical loss or damage, and asserting an exception saying coverage did not apply to losses caused by a virus.

The plaintiffs argued the denial was wrong based on government orders. They also claimed the virus itself was a direct physical loss or damage. One more argument is that the loss was caused by an action of civil authority.

The complaint said the policy's virus exclusion does not apply, but even if it did, the Hartford should not be able to use the virus exclusion because it's against public policy, among other things.

Plaintiffs lawyers Mark Kindall and Douglas Needham of Izard, Kindall & Raabe in West Hartford, Connecticut, didn't respond to emails seeking comment by deadline.

Growing Trend

Kennedy Hodges' insurance lawsuit is only one example of a growing trend nationwide.

Groups of plaintiffs lawyers are seeking to a multidistrict litigation designation to handle what they say will be a flood of business interruption claims caused by the virus. The attorneys seek to coordinate cases against eight insurance companies filed in Florida, California, Illinois, New York, Pennsylvania,  Ohio, Oregon, Texas and Wisconsin in the Eastern District of Pennsylvania.

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Read more: Lawyers Suing Insurance Firms Over COVID-19 Coverage Seek MDL

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In state and federal courts in Texas alone, at least 45 COVID-19 related insurance lawsuits were filed from March 26 to June 12, according to research by Texas Lawyer on the COVID-19 complaint tracker by Cognition and Hunton Andrews Kurth.

Plaintiffs in the 45 Texas cases are diverse and come from a range of industries: restaurants, clothing stores and hair salons; doctors and dentists; travel agencies; car washes; hemp stores and distilleries; and more.

Here's a look at similar insurance case counts in a handful of other states, according to the COVID-19 litigation tracker.

• Connecticut: 17
• California: 86
• Florida: 65
• Georgia: 8
• New York: 30
• Pennsylvania: 89

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