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A court will not rewrite an insurance policy



RESTAURANTS CLOSE COVID-19 MUST PROVE FOOD POLLUTION TO RESTORE POLITICS

New Orleans Equity, L.L.C. ("New Orleans Equity") owner of two restaurants in New Orleans, LA, requested a summary assessment of the issue of food contamination coverage. Corresponding U.S. Specialty Insurance Company ("USSIC") also responded and requested a summary assessment. I New Orleans Equity, L.L.C. v. U.S. Specialty Insurance Co. ., Civil Action No. 20-1935, United States District Court, E.D. Louisiana (August 3, 2021)

BACKGROUND

Were losses allegedly caused by COVID-19 covered by insurance? New Orleans Equity operates two adjacent restaurants, Galatoire & # 39 ;s Restaurant and Galatoire & # 39 ;s 33 Bar & Steak, on Bourbon Street in New Orleans. One of its employees was infected with COVID-19. Aware that he had contracted the disease, the employee continued to work, especially the weekend of March 13-15, 2020. As a result, New Orleans Equity claimed that the employee “unintentionally and to a large extent contaminated food, beverages, spices, edible garnishes, cooking stations, plates. , cutlery, glasses, cups, salt shakers and other containers ”at both COVID-19 restaurants.

USSIC issued Restaurant Restoration Insurance No. U719-860418 with respect to the two restaurants for a period including March 2020. According to the insurance, business interruptions are covered if there is an "accidental contamination" of an "insured product" (as these terms are defined by the policy). The policy does not contain a COVID-19 or general virus exclusion.

After the New Orleans Equity issued a claim that it had suffered a loss due to this alleged contamination, USSIC hired Johnstone Partners to investigate. Johnstone Partners found that business in restaurants had begun to slow down due to a decline in tourism due to the pandemic. On March 17, 2020, the state of Louisiana and the city of New Orleans ordered all restaurants, including New Orleans Equity & # 39 ;s, to stop eating on the spot. Johnstone Partners found no evidence that any "insured product", as defined in the policy, had been infected. As a result, USSIC denied coverage.

EXPECTED MOTION

In its summary judgment motion, the New Orleans Equity claims that the USSIC seeks to rewrite the policy to require the insured to provide scientific evidence of contamination in the form of test results and evidence of actual illness in order to trigger coverage. . Furthermore, New Orleans Equity argues that the insurance term "insured product" should be broadly defined to include not only food, but also related items such as plates and tables. The USSIC claims that there is no test requirement under the policy, but New Orleans Equity still bears the burden of proving that an insured event occurred.

In its motion for summary judgment, the USSIC claimed that the burden was on New Orleans Equity, as it insured, to prove coverage. Under the terms of the policy, the USSIC states that New Orleans Equity must prove that (1) an insured event occurred, (2) the event was reported to the USSIC as required in the incident notice, and (3) the insured event directly and caused only one loss.

LAW & ANALYSIS

Interpretation of insurance policy

According to the terms of the contract, the policy is governed by Louisiana law. Under Louisiana law, insurance, like all other contracts, is interpreted in accordance with the general rules of interpretation of the Louisiana Civil Code. Clear and unambiguous policy formulation that expresses the parties' intention is executed as written.

Even if the insured has the burden of proof that the circumstances constitute a covered claim, the insurer has the burden of proof that any exceptions apply.

Under the terms of the insurance, "

An insured product is defined as:

all ingestible food products, or any of their ingredients or components, that have been notified to the insurer in the application filed with the insurer for the date of this insurance or by additions to such application. [19659019] New Orleans Equity claimed that restaurants fall within the definition of insured products. It emphasizes the phrase in the definition that discusses products that "have been reported to the insurer on the application that is with the insurer ." The USDC concluded that this strained argument ignores the beginning of the definition, which, however, limits insured products to "food consumables … which have been reported to the insurer on the application." As restaurants are not consumable products, they can therefore not fit into the policy definition of insured products.

Accidental Contamination

In summary, the USSIC only needs to identify the absence of factual support for one or more elements that are essential to New Orleans Equity's insurance coverage requirements. If it does, the burden shifts to New Orleans Equity to provide evidence to substantiate the element or to prove a genuine issue of material facts about the element. can not be seen with the naked eye [satisfied] the terms of the policy … without scientific tests, "replied Danielle Bouchard, the designated corporate representative of the USSIC:" Not that I can imagine it in my head. "But Bouchard also testified that testing was not necessarily required to prove contamination" as long as there is evidence of that contamination. "

New Orleans Equities expert, Dr. David W.K. Acheson, says in his report that "[i] during the shift [the employee’s] on March 10-13, restaurant receipts show that he served 18 cocktails, 10 salads, 2 shrimp remoulade salads, 2 iced teas and 4 cold desserts to patrons." Therefore, about the products were contaminated, some effects would probably be seen.However, there has been no evidence from New Orleans Equity that any customer became ill from exposure linked to these articles.

When no product has been shown to be contaminated, harm to consumers was neither probable nor The insured is essentially asking the court to rewrite the policy to claim a probability that a product is contaminated rather than a probability that the contaminant it contains is dangerous. a likelihood that the infected employee (the alleged polluter) may have contaminated insured products.the food they were served, New Orleans Equity has not shown inadvertent possible contamination according to the policy. In the summary judgment in the court, New Orleans Equity did not bear its burden because they have not shown that accidental contamination occurred.

Bad Faith

Without a valid insurance coverage claim, there can be no claim for statutory penalties and legal fees against the USSIC according to Louisiana Revised. New Orleans Equity's claim of bad faith therefore necessarily falls. A summary judgment for the insurer was granted and a summary judgment for the insured was denied.

Even if there was no exclusion of viruses or bacteria in the USSIC insurance, the insured must still prove that the food he served was contaminated because it was served by a waiter affected by Covid-19. They failed to do so and their expert could say nothing more than that there was a possibility that the customers had been infected and that certain foods may have been affected by droplets containing the Covid virus. The actual loss was due to the suspension and the claim, although creative, could not prove.

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He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance and claims management attorney and more than 54 years in the insurance industry.

He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurance companies and their indemnity staff to become insured.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library-https: //zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/posts; and the last two issues of ZIFL at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on -insurance / id1509583809? uo = 4


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