Philadelphia restaurant sues Berkley E&S unit over Covid-19 losses

WR Berkley is involved in another lawsuit seeking an insurance pay out for Covid-19 business interruption (BI) losses, with a restaurant in Philadelphia suing its E&S unit Admiral Indemnity Company.

River Twice Restaurant is seeking a declaratory judgment in the Eastern District of Pennsylvania for coverage of losses stemming from the coronavirus pandemic.

The complaint states that the River Twice’s all-risk policy from Admiral provides cover including business personal property, business income and extra expense, contamination coverage and additional coverages.

River Twice shut its doors in March following guidance from the Centers for Disease Control that individuals should avoid gatherings of more than 10 people and under an order from Philadelphia Mayor Jim Kenney requiring the city’s restaurant dining rooms to close and remain closed indefinitely in order to slow the spread of the coronavirus. Pennsylvania Governor Tom Wolf issued a similar order after that.

The complaint argues that the virus is physically impacting River Twice.

“Based on information and belief, the Defendant has accepted the policy premiums with no intention of providing any coverage for business losses or the Civil Authority extension due to a loss and shutdown,” the complaint said. “The Policy’s Exclusion of Loss Due to Virus or Bacteria does not apply to the business losses incurred by Plaintiff here”.

The complaint said that the defendant disputes and denies this.

This complaint’s mention of an exclusion due to virus or bacteria is in contrast to some of the other lawsuits filed against insurers which argue there was not a specific exclusion. In other complaints it is not clear whether there is an exclusion or not.

The River Twice complaint added: “The scientific community, and those personally affected by the virus, recognize the Coronavirus as a cause of real physical loss and damage. It is clear that contamination of the Insured Property would be a direct physical loss requiring remediation to clean the surfaces of the restaurant.”

River Twice’s attorney, Richard Golomb of Golomb & Honik, said in a statement:  “It is clear that insurance companies want to deny coverage to businesses who have been severely impacted by this pandemic.”

The lawsuit was filed on 10 April and was the second time in two days that WR Berkley had been sued by a restaurant group over Covid-19 losses.

On 9 April the El Novillo Restaurant Group in Florida sued Lloyd’s syndicates of WR Berkley, Axa XL, Beazley, Brit and Cincinnati Financial anticipating a refusal to pay out for BI caused by the coronavirus under its all-risk commercial property policy.

That pre-emptive action applies not only to the El Novillo Group, but to all proposed class members that their all-risk commercial property policies do not contain an exclusion for Covid-19 business interruption losses.

Hot source of litigation

Lawsuits against insurers over BI losses from the pandemic are piling up. At least 18 lawsuits are known to this publication with others likely to have been filed.

Lloyd’s underwriters have been named as defendants in at least six suits. Cincinnati Financial has been named in three, while The Hartford and Society Insurance have been named in two each.

The restaurant industry is proving a big source of litigation for insurers.

In addition to individual lawsuits that have been filed, a non-profit group has been launched by celebrity chefs to take on insurers over BI losses. The Business Interruption Group (BIG) is threatening legal action unless insurers pay losses.

This has even caught the attention of US President Donald Trump, who has urged insurers to pay BI losses where fair.

In a press conference on Friday (10 April), Trump commented: ““I speak mostly to the restaurateurs. They’ve been paying for 25, 30, 35 years business interruption. They’ve never needed it, all of a sudden they need it.”

He added: “I’m very good at reading language … and I don’t see the word pandemic mentioned. Now in some cases it is, it is an exclusion, but in a lot of cases I don’t see it. I don’t see a reference and they don’t want to pay up. I would like to see the insurance companies pay if they need to pay, if it’s fair.”