In a pre-COVID 19 case, a federal appeals court upheld a lower court decision and found a restaurant in Miami was not entitled to cover business interruptions, as well as reimbursement of other expenses, under its insurance policy for lost business due to nearby road construction.
Mama Jo & # 39 ;s Inc., which operates the Berries restaurant in Miami, filed a claim with its insurance company, Sparta Insurance Co., seeking more than $ 626,000 in connection with the loss of business interruptions and other expenses during its all-risk coverage due to road works in its general vicinity from December 2013 to June 2015, according to Tuesday's ruling by the 11th U.S. District Court in Atlanta Mama Jo & # 39 ;s Inc., dba Berries v. Sparta Insurance Co .
The restaurant sought $ 292,550.84 due to lower-than-expected sales, as well as $ 31
After Sparta, now in the sewer, denied the claim, the restaurant filed a lawsuit in the U.S. District Court in Miami, which ruled in favor of the insurer. A unanimous three-judge appeal court panel upheld the lower court's decision.
The policy's form of business income "requires that an" interruption "of business be caused by direct physical loss of or damage to property," the decision said.
"Although Berries had shown a" disruption "of the business, Berries did not present any … evidence that it suffered direct physical loss or damage to its property under the policy," said the decision, which also confirmed the lower court's refusal of Berrys. other allegations in the case.
Sparta lawyer Jorge A. Maza, a partner with Hinshaw & Culbertson LLP in Miami, said: “The client is really happy with the decision. We saw that when the pandemic began, it could have potential consequences for insurance companies that interpret COVID claims, and we believe that the decision will probably be helpful for insurance companies that handle similar languages in the COVID context.
Berry's lawyers did not respond to a request for comment.
Last week, a federal court in Texas shared another blow to commercial policyholders seeking coverage for coronavirus-related business interruption losses, ruling that pandemic-related lockdowns do not constitute a direct physical loss for a group of barbershops.