A group of nearly 50 restaurants in New York, ranging from high-end eateries to an iconic bagel shop, are suing their insurance companies for hundreds of millions of dollars in damages in a suit claiming that their coronavirus-related business interruption claims were wrongly denied.
The restaurants claim to have suffered direct physical losses from the pandemic and have to partially reconstruct their properties to accommodate serving customers according to restrictive reopening rules.
The lawsuit filed by the law firm Jenner & Block LLP in the state court of Brooklyn lists 27 insurance companies as defendants, including units of major commercial property insurance companies such as American International Group Inc., Chubb Ltd., Travelers Cos. Inc. and Zurich Insurance Group Ltd.
The Complainants in the Costume, Abruzzo Docg Inc. d / b / a Tarallucci e Vino et al. Acceptance Indemnity Insurance Co. et al include Danny Meyer's Union Square Café, Grand Central Oyster Bar, Café Wha? and Ess-a-Bagel.
"Our clients suffered direct physical loss and damage ̵
The restaurants claim that they are liable for coverage under all risk insurances issued by the various insurance companies for lost income and extra expenses incurred during forced closures and limited reopening during the COVID-19 pandemic.
Among other things, government-imposed restrictions required restaurants to make physical changes when they reopened, the suit says.
“They had to physically manipulate tables, chairs and other equipment into less functional arrangements; install plexiglass or other temporary barriers to prevent assembly; place markers on the floor or walls to indicate six feet of separation; and restructure routes for entry and exit, "says the suit.
In addition, the restrictions limit the number of customers that can be served, says the suit.
Insurers denied claims because the policy requires" direct physical loss of "or" damage to " the restaurants to trigger coverage of business interruptions, says the suit.
"But there is no language in any of the policies that require this narrow construction. Under all reasonable interpretations, the terms "direct physical loss of" or "damage to" property are much broader and would have detrimental physical effects, as well as those caused by closing and partial resumption of executive orders, "the court's documents say.
Points of restaurants all over the United States have sued their insurance companies in state and federal courts seeking coverage of business interruptions for COVID-19 losses, but most of the previous cases have been filed by individual companies or much smaller groups.
far in question has benefited Insurance companies.
Insurance companies claim that many of the policies include exemptions for viruses and infectious diseases, one of the few cases that included a policy offering coverage of named viruses, issued by insurance companies in Lloyd & # 39 ;s of London, was decided in June .
More insurance and risk management news about the coronavirus crisis here .