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A group of Chicago restaurants has lodged lawsuits against Society Insurance Inc., alleging their business interruption claims for losses during COVID-19 closures were wrongly denied.
The lawsuits, filed by plaintiffs The Angry Crab, Tommy Gun’s Garage, City Rock Korean Kitchen, and Perilla Korean BBQ, claim that Society Insurance denied their policy claims “in bad faith,” allegedly issuing “blanket denials” for their losses. Contrary to the denials, the Chicago restaurants say that the presence of coronavirus in and around their businesses made the eateries “unsafe and unfit for” their intended use.
The lawsuits, filed on behalf of the restaurants by the same attorney, argue that Standard Insurance pinned its denial on the lack of physical losses to the properties. The restaurants say that Standard Insurance’s reasoning is wrong.
“The presence of a substance like COVID-19 does in fact legally result in property damage,” contend the Chicago restaurants in their lawsuits. “Illinois courts have consistently held that the presence of a dangerous substance in a property constitutes ‘physical loss or damage.'”
Pointing to a virus exclusion contained in other companys’ business interruption insurance policies, the plaintiffs also argue that Standard Insurance’s policy covers losses related to coronavirus lockdowns, which were issued in Chicago starting March 15, 2020. They argue that, had the Standard wanted to exclude claims for losses related to coronavirus, the policy it sold should have contained a virus exclusion.
The lawsuits say that the Chicago restaurants would not have purchased business interruption insurance policies from Standard Insurance had they known that the company would not cover COVID-19-related losses.
“In breach of its insurance obligations that it voluntarily undertook in exchange for Plaintiff’s premium payments, Defendant has denied Plaintiff’s claims arising from the State ordered interruption of its business,” contends one complaint.
This legal action, filed recently in Illinois federal court, joins a number of other business interruption insurance lawsuits across the US and other countries alleging that insurance companies are wrongfully denying business owners claims in the wake of COVID-19 losses.
Do you own a restaurant affected by COID-19 shutdowns? Did you make a business interruption insurance claim? Tell us about your experience in the comment section below!
The lead plaintiffs are represented by Brian LaCien and Andrew W. Mason of Smith LaCien LLP.
The Chicago Restaurants Business Interruption Insurance Class Action Lawsuits are Angry Crab Corp. v. Society Insurance Inc., Case No. 1:21-cv-01859, Angry Ventures LLC v. Society Insurance Inc., Case No. 1:21-cv-01860, Sansoo Ventures LLC v. Society Insurance Inc., Case No. 1:21-cv-01861, City Rock LLC v. Society Insurance Inc., Case No. 1:21-cv-01864 and Tommy Gun’s Garage Inc. v. Society Insurance Inc., Case No. 1:21-cv-01863, all in the U.S. District Court for the Northern District of Illinois.
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