Houston Wig Shop Owner Denied COVID-19 Insurance Claim When She Needed it Most

And she's among the first in the state to fight back

Barbara Lane-Snowden is a small business owner with a big goal to serve others. And last fall, her dream came to fruition when she launched her very own wig store, called Hair Goals Club. Hair Goals Club, located in Humble just outside Houston, sells both synthetic and real human hair wigs of all different lengths and sizes. It has various styles to fit all ages and genders. And many of its clients are those dealing with serious health issues like cancer and Alopecia Areata (a condition that causes hair to fall out in small patches).

She shared her story and desire to help people with the Houston Chronicle last December.  Whether they had experienced hair loss due to chemotherapy or another condition, Barbara said, "It's devastating, especially if you're dealing with the situation to where you are going through chemotherapy, and it's such an immediate change."

But sadly, when COVID-19 struck, all non-essential businesses were forced to close temporarily. And Barbara's store was considered non-essential. She had been in business for just a short four months at the time of the news. And she thought that the business interruption insurance she'd invested in could help her weather the storm. Yet when she filed a claim, the answer came back no. Denied.

Barbara was shocked. "I cried like a baby because I couldn't believe it. That insurance was my last line of defense," she said in an interview with Bloomberg.

Unfortunately, Barbara is not alone. Small businesses around Texas and across the country are denied their claims. The insurance companies say that pandemics are not included in Business Interruption Insurance and that this type of insurance is meant for physical damages.

Yet, the American Property Casualty Insurance Association estimates that small businesses with less than 100 employees could lose as much as $431 billion a month.

However, Barbara and many other business owners are fighting back. She was one of the first business owners in Texas to file a lawsuit against her insurance company for denying the claim. And others are following suit.

As it stands, each state will have to determine how it will address these claims. Some of the factors that may play a role in the decisions include 1) whether COVID-19 did cause physical damage to the business, 2) would it fall into a category of applicable exclusions, 3) any interruption-related coverage extensions that could be applied, and 4) is it possible that legislation is introduced to limit insurance companies abilities to deny claims.

The outcome remains to be seen. As for now, Barbara is a trailblazer who is fighting a legal battle that many other business owners are watching – and may follow suit.  

DeSouza Law Firm is a leading personal injury firm representing accident victims throughout Texas.

If you've been injured by a car, truck, 18 wheeler, company vehicle, or in the oilfield, call DeSouza Injury Lawyers today at 361-799-2222