Three restaurants in New Jersey recently filed class-action lawsuits against their nsurers for failing to cover their business interruption claims related to the COVID-19 pandemic, reports Insurance Business. The first lawsuit was filed on behalf of Fiorino Ristorante located in Summit, NJ, and named Chubb as the defendant. That suit was submitted on April 20, 2020. The second lawsuit was filed on April 29, 2020 against Cumberland Mutual Fire Insurance and was filed by the operator of Millburn, NJ-based Cara Mia.
The third lawsuit came shortly after on May 5, 2020, also against Chubb, and it named Benito Ristorante located in Union as the plaintiff.
The operator of Benito Ristorante came forward with their lawsuit after realizing the reason for the denial of coverage didn’t coincide with the terms of their policy. According to the lawsuit, Chubb’s policy states that “business interruption insurance covers a disruption of the business that is caused by physical loss or damage to the property by a “covered peril.” It goes on to explain that “an infectious agent or communicable disease does not constitute as physical loss or damage.”
Now, according to the restaurant’s lawsuit, “Chubb wrongly concluded that the policyholder suffered no physical loss or damage under the policy language.” In fact, the suit explains that “applicable case law holds that loss of use of property that has not been physically altered does constitute ‘physical loss or damage’ for purposes of first-party property insurance, such as that contained in the policy.” Because Benito Ristorante’s owner was seeking coverage for losses caused by the mandatory shutdown orders that were issued by the state and not a “virus, bacterium, or other microorganism that causes physical distress, illness, or disease,” they believe they are entitled to coverage.
The three restaurant owners join many other business owners in the U.S. who have filed suit against their insurers for wrongfully denying their business interruption claims.
Suing Your Insurer After Being Denied Coverage
When an insurance company denies a policyholder access to coverage they are rightfully entitled to receive, they can usually work with the insurer directly or file an appeal to get the denial reversed. Unfortunately, many business owners are finding that no matter what avenue they take, their insurers aren’t willing to cover their business interruption claims filed for COVID-19 losses. Because the pandemic has affected thousands of business owners across the U.S., insurance companies aren’t prepared to pay out the billions of dollars it would take to cover the claims.
With nowhere else to turn to for help, many business owners are now contacting New Jersey insurance claim denial attorneys for assistance. And if your business interruption insurance claim was recently denied, you can always contact USAttorneys.com to get connected with an insurance lawyer in your area who is more than willing to help you too.