Law firm Grant & Eisenhofer has filed a class action lawsuit against Illinois-based Markel Insurance for failing to accept claims from franchisees of national fitness chain Anytime Fitness that were shuttered and lost business due to state imposed COVID-19 restrictions.
The four Anytime Fitness outlets named in the complaint are operated by Fountain Enterprises.

The lawsuit, alleging breach of contract and violations of the duty of good faith and fair dealing, seeks to represent all Anytime Fitness locations who duly paid premiums to Markel and were denied compensation for losses suffered due to shutdowns ordered by state authorities to fight coronavirus.

The suit was filed in U.S. District Court for the Northern District of Illinois. The Anytime Fitness policyholders seek a declaratory judgment from the Court that their losses should be covered by the Markel Insurance contract, as well as compensatory, punitive, and other damages.

Grant & Eisenhofer director Diandra Zimmermann, who heads the firm’s office in Birmingham, Alabama, said, “Markel issued commercial policies and collected regular premiums from Anytime Fitness and thousands of other similar businesses for years. These policies specifically provide for coverage in the event of a crisis, for business interruption and for acts of a civil authority that impedes business operations.

“Now, while our clients are fighting to stay afloat in a crippling pandemic with state-imposed restrictions on operations, Markel refuses to honour the terms of the policies it issued. Anytime Fitness franchisees have been forced to bring suit to assert their rights as commercial policyholders.”

According to the complaint, Fountain Enterprises and Markel agreed to an all-risk coverage policy, meaning that all risks are covered unless specifically excluded or limited by the policy. It protects Fountain Enterprises against loss of business income due to a suspension of operations, and also covers expenses incurred in maintaining the business while it is closed, or in restarting it.

The complaint notes that the “civil authority” portion of the policy protects the insured in the event that there is no lawful way to reach the premises, i.e., when civil authorities prevent access to the business – which is the exact circumstance of the COVID pandemic.

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