Pittsburgh's Mattress Factory sues insurer over pandemic closure claim

The Mattress Factory museum in Pittsburgh filed a federal lawsuit against its insurer last week, alleging that the company refused to cover the museum’s “catastrophic losses” caused by the covid-19 pandemic.

To date, the complaint said, the contemporary art museum on the North Side has lost more than $600,000.

“The impact of the covid-19 pandemic on The Mattress Factory has been dire,” the lawsuit said.

The Mattress Factory had a property insurance policy from The Cincinnati Insurance Company that was to protect against all lost business income and property damage unless there was a specific exclusion in the coverage, the lawsuit said.

The policy specifically says it will pay for the loss of business income if caused “by action of civil authority that prohibits access to the ‘premises.’”

The lawsuit alleges that the governor’s mandatory shutdown in March because of the pandemic applies.

But in April, when museum officials tried to file a claim, they were told that Cincinnati’s policy does not cover damages caused by a virus or communicable disease.

The lawsuit claims, though, that the 2019-20 Cincinnati All-Risk Policy the Mattress Factory purchased does not include an “Exclusion of Loss Due to Virus or Bacteria,” although the policy they purchased for 2018-19 did have a virus exclusion.

The lawsuit alleges breach of contract and bad faith.

The Mattress Factory, which opened in 1977, has three buildings open to the public, as well as an education studio, artists residence and administrative office, the complaint said.

The museum’s education department, the lawsuit continued, serves more than 20,000 people each year.

In 2019, about 58,000 people visited the museum, and more than 40% of the museum’s budget comes from ticket sales.

But since the March closure, the lawsuit said that the museum’s revenues have “plummeted to near $0.”