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Insurance companies win business break decisions against restaurants



A federal appeals court and an appeals court in Maryland upheld lower court decisions in favor of insurance companies in three Covid-19 business interruption-related cases filed by restaurants on Tuesday.

Two of the cases were filed by the 11th U.S. Circuit Court of Appeals in Atlanta, while the third was issued by an Interim Court of Appeals in Maryland, Baltimore.

The 11th district upheld a ruling by the U.S. District Court in Tampa, Florida, in a lawsuit filed by Bradenton, Florida-based First Watch Restaurants Inc., which operates more than 430 restaurants in 28 states, against Zurich Insurance Group Ltd. American Insurance Co., according to the judgment in First Watch Restaurants Inc. v. Zurich American Insurance Co.

The judgment referred to the Court of Appeal̵

7;s previous decision in SA Palm Beach LLC v. Some underwriters at Lloyd’s London and the decision of an Florida Court of Appeals in Commander, Inc., v. Certain Underwriters at Lloyd’s London, to confirm the decision of the U.S. District Court in Tampa, Florida.

“First Watch’s arguments are precluded by the interpretations of the phrase ‘direct physical loss of or injury to'” in SA Palm Beach and Commanderit said in the verdict.

“We reject Frist Watch’s argument that its policy language can be distinguished from the policy language in several cases before the court in SA Palm Beach, ” said the decision. “We easily conclude that there is no difference of principle.”

The 11th circuit has been decided Left Field Holdings III v. Colony Insurance Co., filed by a company that operates the Lime Fresh Mexican Grill in Doral, Florida, upheld a decision by the U.S. District Court in Miami in favor of the Argonaut Insurance Co. unit, Colony Insurance Co.

It also quoted SA Palm Beach decision. It said that in that judgment it considered “that” physical loss of or damage “requires” any significant alteration of the property, “” to deny coverage for the restaurant.

Maryland’s Intermediate Court of Appeal, the Court of Special Appeals of Maryland, ruled in Lloyd’s favor in litigation filed by GPL Enterprise LLC, which operates The Anchor Bar in Frederick, Maryland, according to its judgment in GPL Enterprise, LLC v. Some Insurers at Lloyd’s.

“Like the vast majority of courts that have tried the question posed in this case, including every court of appeal that has tried the question, we conclude that the insurance in question does not cover the purely financial losses suffered by GPL in this case.” it was said, to confirm rejection of the restaurant’s contractual breach claim and the summary judgment against it.

Lawyers in the cases did not respond to requests for comment or could not be located.


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