Jessy Edwards  |  June 22, 2021

Category: Covid-19

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(Photo Credit: IOANNIS STAMOU/Shutterstock)

A Miami restaurant that had a pandemic-related insurance claim denied is escalating its class action lawsuit to the 11th Circuit Court of Appeals, arguing it has adequately shown the damages it suffered.

Town Kitchen — a South Miami bar and grill — filed its appeal in the 11th Circuit last Thursday, saying a Florida federal judge was wrong to throw out its case over “ambiguous language” in its insurance policies with Certain Underwriters at Lloyd’s of London, Indian Harbor Insurance Co., and HDI Global Specialty SE, Law360 reported.

In March, U.S. District Judge Federico A. Moreno dismissed Town Kitchen’s class action lawsuit, saying the restaurant didn’t suffer any physical loss, so wasn’t eligible for business interruption coverage under its insurance policy.

He said other courts around the country had similarly ruled that “all-risk” policies do not include losses suffered due to the pandemic. 

Moreno ruled that Town Kitchen’s losses were closer to as if they were forced to close due to a parade in town or a lost liquor license, Law 360 reported. 

“Under their loss of use theory, Town Kitchen is attempting to shoehorn their losses stemming from the inability to use their restaurant at full capacity into something covered by their insurance policy merely because they are caused by a physical virus — but coronavirus particles damage lungs, they do not damage buildings,” he said. 

However, in its appeal, Town Kitchen said it had proven how the pandemic damaged the restaurant. It said “physical loss” could include the loss of the ability to use its property as a result of pandemic shutdowns, as it wasn’t clearly defined in the policy.

“Town’s necessary suspension of dine-in operations because of the viral pandemic qualifies as ‘direct physical loss,'” the restaurant reportedly said. 

“Both the presence and imminent threat of a contagious and dangerous virus in, on and around the insured property such that it cannot be operated safely satisfies the physicality requirement.”

It said the pandemic had affected it in the same way the presence of asbestos, noxious odors, or chemical fumes might, all of which could be covered under the policy.

Meanwhile, the COVID-19 pandemic has resulted in countless losses to many businesses, losses which business owners expected would be covered by their business interruption insurance policies

Despite the COVID-19 pandemic and governors’ executive orders in various states causing businesses to close, numerous insurance companies are refusing to pay out the business interruption insurance claims, leaving business owners reeling in shock.

As a result, many other owners are also taking action, filing complaints and lawsuits against the insurance companies who are denying their claims. Click here to read about more business interruption insurance lawsuits

Do you think insurance companies should cover business closures due to the pandemic? Let us know in the comments! 

The restaurant is represented by Jason S. Mazer of Cimo Mazer Mark, Kevin B. Love, Lindsey C. Grossman and Michael E. Criden of Criden & Love PA, and by Linda P. Nussbaum of Nussbaum Law Group PC.

The Town Kitchen Pandemic Insurance Class Action Lawsuit is Town Kitchen LLC v. Certain Underwriters at Lloyd’s et al., Case No. 21-10992, in the U.S. Court of Appeals for the 11th Circuit.


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