This month, the proprietors of more than 10 restaurants, bars and bakeries in Washington, D.C., including the Michelin-starred Gravitas and Pineapple and Pearls, sued their shared insurance company, joining a growing list of restaurateurs who are seeking relief from an industry they thought would protect them from any unpredictable event, including a pandemic of historic proportions, the Washington Post reported. The owners are pressing carriers to honor business-interruption policies during an outbreak that has wreaked so much financial havoc that it could bankrupt insurance companies and put at risk claims not related to covid-19. One side has few cash reserves and a trickle of revenue from takeout and delivery. The other side has an $800 billion surplus that, despite its size, could vanish in a matter of months, insurers say, if they start paying out these claims. After governments shut down dining rooms, restaurants large and small started taking their insurance cases to the courthouse: Boston-based Legal Sea Foods sued Strathmore Insurance Co. The owners of Musso and Frank, the century-old Los Angeles institution, sued Mitsui Sumitomo Insurance. A Houston restaurant company sued Scottsdale Insurance Co. Some complaints seek class-action status. Others have been filed by a single operator, such as Thomas Keller, the mastermind behind the three-star Michelin restaurants Per Se in New York and the French Laundry in California, who sued Hartford Fire Insurance Co. These operators’ claims have usually been denied for one of two reasons: The policy specifically excluded viruses or the property had not suffered any physical damage, like after a flood, hurricane or other natural disaster. Attorneys for the restaurants don’t think the denials are as clear as the carriers say, especially with all-risk policies, those with limited coverage for viruses (like Keller’s) or those that cover “civil authority” actions such as when a city, county or state shuts down in-person dining.
