Gentlemen Club Owners Say COVID-19 Closure Orders Caused ‘Physical Loss’

LOS ANGELES — The owners of 23 gentlemen’s clubs in various states and one “adult superstore” have sued Certain Underwriters at Lloyd’s London for coverage of business interruption losses arising from the COVID-19 pandemic and related government closure orders.

In an Aug. 24 complaint filed in the U.S. District Court for the Central District of California, plaintiffs contend that they suffered “direct physical loss” of their insured clubs, triggering coverage under their policy. They say that because of the government closure orders, they cannot conduct their business operations, directly resulting in losses totaling millions of dollars.

Plaintiffs are Rialto Pockets, …