Child care centers in Kentucky are concerned that their insurer is not covering their business interruption claims since they have not been tested for COVID-19.
Two child care center operators have claimed that their insurer, West Bend Mutual Insurance, has denied coverage for their currently closed businesses. The two also reportedly received a denial letter from the insurer, which stated that while their contract covers a shutdown or suspension due to “an outbreak of a communicable disease” that has occurred “at the insured premises,” West Bend will not cover the claims unless there is proof that there had been an active case of the coronavirus on their premises.
“My insurance company told me that if I would have had an active [COVID-19] case, then they would have paid,” Kathy Donelan, the owner of a child care center in Highland Heights, KY, told The Enquirer.
Donelan added that she does not know if her child care center had a COVID-19 case because of limited testing.
At the onset of the pandemic’s spread, Kentucky medical officials prioritized the testing of vulnerable groups - such as elderly patients – over others due to limited supplies. Now that the state has been placed into shutdown, businesses such as Donelan can no longer arrange for testing.
Another child care center operator, Melanie Barker of ABC Children’s Academy in Bowling Green, KY, explained that it is impossible to know if her facility had an active case.
“There was no testing in January, February and March,” Barker said. “...So how can they deny us coverage when our governor made us close and there was no testing available?”
Donelan and Barker are among the over 60 center owners in Kentucky who have approached personal injury and insurance lawyer Gary Logsdon. While Logsdon said that no formal attorney-client relationship had been established yet, he is of the opinion that the child care centers should be covered.
“...the usual denials from insurance companies must be corrected and the REAL DAMAGED [emphasis in original] persons and their businesses compensated,” the attorney said in an email statement to The Enquirer.
