Beloved East Bay Brand Oaklandish Sues Insurer Over Coronavirus Losses

Oaklandish, the popular local apparel brand, is joining a growing list of small businesses suing their insurers over unpaid claims for losses sustained during state-mandated coronavirus closures.

The Oakland-based company filed a class-action suit Monday against Sentinel Insurance Company in U.S. District Court in San Francisco. According to the lawsuit, Sentinel’s failure to pay “leaves Oaklandish in financial straits — precisely the situation it sought to avoid when it obtained coverage for business interruptions.”

Oaklandish’s CEO and creative director, Angela Tsay, said revenue is down more than 75% after the company was forced to shut down retail operations in mid-March and lay off or furlough most of its roughly 30 employees. Its two Oakland retail operations have since reopened, but business is slow.

“We’re just trying to keep it all together now,” Tsay said. “It’s going to take years before we get back to where we were. We were lucky enough to have cash on hand to make it through the initial weeks of the shutdown. But like many other businesses, large and small, we’re operating on borrowed money.”

Small business owners who relied on borrowed money to weather the pandemic were counting on their insurance companies to pay out claims, Tsay said. Without that, she predicts, a spate of small businesses will be forced to default on their loans.

Oaklandish is known for its stylized oak tree logo that has come to symbolize pride in “The Town” among native Oaklanders and transplants alike. The company also provides local nonprofits with discounted T-shirt printing.

In response to the suit, The Hartford, an affiliate of Sentinel, said its business interruption coverage doesn’t cover the kind of losses Oaklandish experienced.

“Unfortunately, viruses are generally outside the scope of business interruption coverage,” said The Hartford spokesman Matthew Sturdevant in a statement. “These policies do not cover this exposure and, accordingly, premiums were never collected for it.”

But Tsay counters that Oaklandish bought comprehensive coverage for this very reason — as a safeguard during a major crisis. Business interruption insurance, she thought, meant her company would be covered in the event it couldn’t do business as usual — period.

“We filed the claim online and just received a form letter email response and then a letter in the mail,” Tsay said. “We were just a case number to them. We didn’t appeal. They made it very clear that there was nothing to talk about.”

She added, “Having some sort of compensation from the insurance companies that we’ve been paying for so long would be extremely helpful.”