Florida restaurant files class action seeking virus cover

A Florida restaurant on Thursday sued insurers at Lloyd’s of London in federal court for coronavirus-related business interruption coverage in a suit filed seeking class action status.

The suit filed by El Novillo Restaurant, which has branches in Hialeah, Florida, and Miami, is one of more than a dozen suits filed by commercial policyholders over the past month seeking declaratory rulings that their business interruption policies cover government-ordered shutdowns of their operations.

The suits include some filed by well-known restaurants in various states, including a suit by the Billy Goat Tavern in Chicago, which also seeks class action status.

On Friday, President Donald Trump weighed in on the issue saying many restaurants and other businesses have paid business interruption premiums for years and insurers should “pay if they need to pay.”

Insurers have generally asserted that business interruption coverage, including coverage for closures due to civil authority orders, is triggered only by physical damage. In addition, many business interruption policies have specific exclusions, insurer groups say.

In the suit El Novillo Restaurant v. Certain Underwriters at Lloyd’s London filed in U.S. District Court for the Southern District of Florida in Miami, the restaurant argues that the “COVID-19 pandemic and the corresponding response by civil authorities to stop the spread of the outbreak triggers coverage, has caused physical property loss and damage to the insured property,” court papers say.

The syndicates on the policy included 2003, managed by Axa XL, a unit of Axa SA, which covered 50% of the liability limit, according to the suit. Axa XL declined to comment on the suit.

More insurance and risk management news on the coronavirus crisis here.