For the first time as ruled by an appellate court, an insured restaurant is able to seek COVID-19 shutdown damages.
This rare victory comes from a Louisiana court ruling that now deems New Orleans restaurants’ entitled to payment from their business-interruption insurer for losses incurred during the restrictive pandemic. And its about time too, given that there have been a slew of failed attempts by restaurants to collect on their policies.
It was determined that the Oceana Grill’s owner-operator was entitled to compensation from Lloyd’s since the restaurant’s assumed contamination from coronavirus could be interpreted as physical damage suffered by the establishment.
Chief Judge Terri Love wrote in the ruling:
“The physical presence of COVID-19 substantially diminished the usable space of the property, as tables needed to be pushed farther apart, and resulted in economic losses due to the slowdown of the appellants’ business.”
The company that owns Oceana Grill, Cajun Conti, in addition to numerous other establishments, filed a lawsuit against Lloyd’s of London back in March 2020 on the same day the restaurant was forced to close in an attempt to cover the losses it incurred during the pandemic.
Previously, a lower court denied the company’s claim for damages from their insurer however the most recent ruling reversed that decision.
“Oceana Grill’s parent company was one of the first, if not the first, to file a COVID insurance coverage lawsuit, though many more followed. The general consensus was that the pandemic wouldn’t qualify for business interruption assistance, as it was created to cover closures due to property damage from natural disasters. This court, however, found that the wording is open to interpretation and that physical damage did not have to be ‘obvious and observable.”
More details of this story from The Gateway Pundit:
One of the policyholder attorneys involved said the “dam has broken” with the ruling, paving the way for other businesses to do the same, according to a report from Reuters.
Lloyd’s attorney Virginia (Ginger) Dodd of Phelps Dunbar told Reuters that she believes the ruling was inconsistent with “ten federal circuit courts of appeal and every other state appellate court.”
“We will pursue all options to address what we believe to be an outlier decision,” Dodd added.
Reuters noted that “while Wednesday’s appellate decision is the first to find coverage for COVID-19 income losses under an all-risk property insurance policy, a state appellate court in New York on Monday affirmed a Bronx judge’s ruling that allowed the New York Botanical Garden to sue its Pollution Liability Insurer, Allied World Assurance, for denying its COVID-related loss of business income claim and for breach of the implied covenant of good faith and fair dealing.”
“This lawsuit was all about coverage,” Daniel Davillier, an attorney representing Oceana Grill’s owner, told Nola. “If you don’t have coverage you can’t claim any damages. There are a lot of people out there who suffered losses during the pandemic who’ve been waiting to see how this turns out.”
The Louisiana decision made sure to mention that Oceana paid $91,000 for its business-interruption policy.