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Renowned Napa Valley restaurant The French Laundry on Wednesday became the latest business to seek a ruling that its business interruption policy covers coronavirus-related losses.
In a suit filed in state court in Napa, California, the Yountville restaurant, its sister restaurant Bouchon Bistro and its chef and owner Tom Keller argue that coronavirus contamination constitutes physical damage under its policy with units of the Hartford Financial Services Inc., which should trigger coverage for revenues lost due to the forced closure of the restaurant.
According to the suit in French Laundry Partners LP et al v. Hartford Fire Insurance Co. et al, the French Laundry, which carries three Michelin stars, and the one-star Bouchon Bistro, furloughed more than 300 employees after local health authorities on March 18 ordered local residents to stay at home and ordered nonessential businesses to close as part of efforts to stem the spread of the coronavirus.
Using similar language to a lawsuit filed in New Orleans by the Oceana Grill last week, the Napa suit says: “The global Coronavirus pandemic is exacerbated by the fact that the deadly virus physically infects and stays on surfaces of objects or materials, ‘fomites,’ for up to twenty-eight days.”
John W. Houghtaling, managing partner at Gauthier, Houghtaling LLP in New Orleans, represents the Oceana Grill and the French Laundry.
According to the suit, coverage under the Hartford policy applies “to the actual loss of business income sustained and the actual, necessary and reasonable extra expenses incurred when access to the scheduled premises is specifically prohibited by order of civil authority as the direct result of a covered cause of loss to property in the immediate area of plaintiffs’ scheduled premises.”
A spokesman for Hartford declined to comment on the suit.
Since the onset of the coronavirus in the United States in late January, several insurers and insurance groups have asserted that losses related to the virus are excluded under most standard property and business interruption policies.
Several policyholder lawyers, however, argue that insurance policies could cover lost revenue. Earlier this week, a Native American tribe that runs casinos in Oklahoma also sued its insurers for coverage.
More insurance and risk management news on the coronavirus crisis here.
Commercial policyholders should file business interruption and workers compensation claims for coronavirus-related losses immediately, regardless of concerns over policy exclusions, a brokerage claims expert said.