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An Acworth, Georgia-based restaurant on Monday filed its appeals brief in a claims dispute with its insurer over coronavirus-related business interruption claims.
In Henry’s Louisiana Grill Inc. and Henry’s Uptown LLC v. Allied Insurance Company of America, the restaurant and its associated events business asked the 11th U.S. Circuit Court of Appeals to reverse a federal court ruling that granted the Nationwide Mutual Insurance Co. unit’s motion to dismiss the original lawsuit filed by Henry’s.
The lower court dismissed the suit ruling that Henry’s failed to prove that the restaurant suffered a “physical loss of” property as a result of the COVID-19 pandemic.
More than a thousand small businesses, including numerous restaurants, have sued their insurers arguing that loss of access to their properties under government-mandated closures during the COVID-19 pandemic triggered business interruption coverage under their property policies. Many of the insurers have sought to dismiss the suits arguing that physical damage was necessary to trigger coverage for lost income. Insurers have won most of the initial rulings, but some courts have ruled in favor of the policyholders and many of the cases are expected to go to appeal.
In the 11th Circuit case, Henry’s argues that the lower court “erred in determining the policy covered only damage to property and dismissing the ‘loss of’ language as mere surplusage.”
Ambiguities in the policy should be construed in favor of the policyholder, the filing states.
Nationwide did not immediately respond to a request for comment.
More insurance and risk management news on the coronavirus crisis here.
A North Carolina state court judge has ruled in favor of a group of restaurants in pandemic-related business interruption litigation, holding the state’s order to close the restaurants was a covered physical loss under their policies.