A class action lawsuit has been filed against certain underwriters at Lloyd’s by a pizza restaurant claiming that the insurance company has failed to pay for business loss claims that it suffered due to the worldwide COVID-19 pandemic.

Plaintiffs GIO Pizzeria & Bar Hospitality LLC and GIO Pizzeria Boca LLC say that they own Nick’s New Haven Style Pizzeria & Bar with locations in Coral Springs, Fla. and Boca Raton, Fla. 

GIO states that it was forced to suspend or reduce operations for their restaurant due to COVID-19 and the orders issued by civil authorities in Florida which mandated the suspension of businesses for on-site services.

The plaintiffs alleges that certain underwriters from Lloyd’s London have refused to pay them under their Business Income, Civil Authority, Extra Expense, and Sue and Labor coverage for losses that have occurred due to the COVID-19 pandemic.

In fact, the plaintiffs state that the defendant has, “on a wide scale and uniform basis” refused to pay its insureds under these policies.

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The business interruption lawsuit alleges that, in order to protect themselves if they suddenly had to suspend operations for reasons that were outside of their control, they purchased insurance coverage from LLoyd’s which includes specialty property coverage.

The pizzeria’s policy has a section on “Business Income” coverage, which promises to pay for losses due to the necessary suspension of operations following physical loss or damage to property, the GIO Pizzeria class action lawsuit maintains.

In addition, the policy also provides for “Civil Authority” coverage, in which underwriters will pay for losses incurred by the action of a civil authority that prohibits access to the premises, the plaintiffs state.

The business closure lawsuit claims that the Special Coverage Property Form does not include an exclusion for losses that could occur caused by viruses and communicable diseases.

The pizzeria argues that the presence of a virus or disease can constitute physical damage to a property, which the insurance industry has recognized since at least 2006.

“In the Special Property Coverage Form, Underwriters agreed to pay for its insureds’ actual loss of Business Income sustained due to the necessary suspension of its operations during the ‘period of restoration’ caused by direct physical loss or damage,” the GIO Pizzeria class action lawsuit states.

The restaurants’ policies constitute contracts in which Lloyd’s were paid premiums in exchange for the promise to pay for losses covered by the policy, the GIO pizzeria class action lawsuit argues. Despite this coverage, Lloyd’s underwriters allegedly refuse to provide coverage to the pizzeria.

GIO states that on March 17, 2020, Boca Raton put out a civil authority order which required the closing of bars and restaurants from selling alcohol as well as the suspension of dine-in eating. The plaintiff notes that this order has been in effect since that date and has not been lifted.

On the same date, the plaintiff alleges that Ron DeSantis, the Governor of Florida, issued a civil authority order which restricted bars from serving alcohol and ordered every restaurant to limit its capacity to 50 percent of their current building capacity.

On March 20, DeSantis issued another civil order which required the full suspension of alcohol sales for consumption on site as well as the full suspension of all dine-in eating at restaurants.

The plaintiff says that COVID-19 has caused direct and physical loss to their covered properties under their policies issued by Lloyd’s by denying use of and damaging the plaintiff’s property due to the necessary suspension of their activities. However, the insurance company reportedly won’t provide coverage.

“By denying coverage for any Business Income losses incurred by Plaintiffs and the other Business Income Breach Class members in connection with the COVID-19 pandemic, Underwriters has breached its coverage obligations under the policies,” the plaintiff alleges.

GIO Pizzeria says they have suffered damages as a result of Lloyd’s breaches of the policies and that the insurance carrier is liable for these damages, an amount which will be established at trial.

Prospective Class Members include: “All persons and entities that: (a) had Business Income coverage under a property insurance policy issued by Underwriters; (b) suffered a suspension of business related to COVID-19, at the premises covered by their Underwriters property insurance policy; (c) made a claim under their property insurance policy issued by Underwriters; and (d) were denied Business Income coverage by Underwriters for the suspension of business resulting from the presence or threat of COVID-19.”

The plaintiff is represented by Greg G. Gutzler, Adam J. Levitt, Amy E. Keller, Daniel R. Ferri, Mark Hamill, Laura E. Reasons, Mark A. DiCello, Kenneth P. Abbarno, and Mark Abramowitz of DiCello Levitt & Gutzler LLC, Mark Lanier, Alex Brown, Skip McBride, and Evan Janush of the Lanier Law Firm PC, Timothy W. Burns, Jeff J. Bowen, Jesse J. Bair, and Freya K. Bowen of Burns Bowen & Bair LLP, and Douglas Daniels of Daniels & Tredennick.

The GIO Pizzeria Class Action Lawsuit is GIO Pizzeria & Bar Hospitality LLC, et al. v. Certain Underwriters of Lloyd’s London Subscribing to Policy Numbers ARP-74910-20 and ARP-75209-20, Case No. 1:20-cv-03107, in the U.S. District Court for the Southern District of New York.

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