Restaurant sues Nationwide over business interruption cover

Chez Panisse has filed suit against a Nationwide Mutual Insurance Co. unit for its refusal to pay business interruption expenses in connection with the pandemic.

The well-known restaurant in Berkeley, California, filed suit Tuesday in U.S. District Court in San Francisco against Nationwide unit AMCO Insurance Co., according to the complaint, Panel Et Vie., Inc. dba Chez Panisse Restaurant v. AMCO Insurance Co.

The complaint states Nationwide unit AMCO denied the restaurant’s claim in a “cursory” denial letter that stated coverage was unwarranted because there was no direct physical loss or damage to property.

The lawsuit, which charges the insurer with breach of contract, seeks a declaration its business income losses are covered.

In response to a query, Nationwide issued the same statement it has issued previously, stating “Business interruption coverage due to a virus outbreak has been excluded from standard policies issued to business owners across the insurance industry for quite some time. The risk for such an event is so vast, including it in standard coverage would make such coverage unaffordable or even unavailable.”

Earlier this month, a Michigan state court judge ruled the owner of two central Michigan restaurants cannot recover revenue lost during the coronavirus lockdown under a business interruption policy because the properties did not sustain a direct physical loss.

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