Well-Known Local Restaurants and Non-Profits Sue Insurance Companies for Covid Losses

Well-known restaurants, Lettuce Entertain You and Gibson's Restaurant Group are among several parties in being represented by the local law firm, Jenner & Block. It's a precedent-setting suit and the stakes are epic.

A  list of restaurants and non-profits are suing insurers for allegedly refusing to cover losses sustained during COVID-related shutdowns.

This is not the first lawsuit attempt, but this one looks to be among the most sweeping: 42 plaintiffs, including Lettuce Entertain You, Manny’s Coffee Shop & Deli and Gibsons Restaurant Group, filed suit in Cook County Circuit Court against 19 insurers.

The issue is contentious, with epic stakes. Insurers contend their business-interruption policies exclude "act-of-god" events like the coronavirus, arguing that damages must be linked to property losses from fires and other specific causes.

In July, a judge in Michigan handed a preliminary victory to the insurance industry, ruling in a case involving a restaurant that “some tangible alteration to a property is required to trigger coverage,” according to Insurance Journal.

Jenner & Block attorneys representing the plaintiffs aren’t citing the virus itself as a cause of action. Rather, they are focusing on “unprecedented” shutdown orders and “restrictive” reopening plans, according to the 160-page complaint.

Plaintiffs accuse the insurers of breach of contract and, because they charged premiums without covering losses, of unjust enrichment.

Also included as plaintiffs are two non-restaurant entities, The DuSable Museum of African American History and the Peggy Notebaert Nature Museum.

Defendants include Schaumburg-based Zurich American Insurance; Illinois Casualty, based in Rock Island; Milwaukee-based Badger Mutual Insurance, and Hartford Fire Insurance, based in Connecticut. Attorneys for defendants were not identified in court documents.

The complaint brings in to question the legal status of shutdown and reopening orders, arguing, “The shutdown orders, and the restrictive reopening orders that followed, are executive orders—not statutes, ordinances, regulations or legislative acts.”

Jenner & Block maintains the scope of the lawsuit—the number of parties and their combined national reach—is unprecedented for its type. Besides Lettuce, defendants like Noodles & Co. and Roti Restaurants each have dozens of locations.

From Cain's Chicago: July 31, 2020

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