The insurer wants Restaurant Ore’s COVID cover suit.
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Law360 (June 18, 2021, 5:10 p.m. EDT) – A Portland restaurant may not qualify for coverage for losses during the COVID-19 pandemic, Cincinnati Insurance Co. argued, saying a proposed Federal class action lawsuits cannot connect government stop orders to property modification causing “direct physical damage or loss”.
Cincinnati on Thursday asked that the lawsuit be brought, arguing that its commercial property insurance policy did not cover the losses of the Papi Chulo restaurant for temporary closure under orders to slow the spread of the coronavirus. There has been no physical alteration of the property, the insurer said.
“Courts across the country have overwhelmingly concluded that there is no coverage for COVID-19 business interruption claims as the coronavirus and associated government shutdown orders do not change nor do they physically alter the property. The outcome shouldn’t be any different here in Oregon, “Cincinnati said. .
Papi LLC, owner of the Portland restaurant, filed the putative class action lawsuit in March, alleging that Cincinnati had universally denied coverage for losses from the pandemic. But the restaurant argued that the cover exists, highlighting the loss of use of its property under the closure orders and the “significant changes” needed before the reopening.
For example, the restaurant said it needs to install protective barriers, increase its cleaning and disinfection processes, adjust opening hours and employee hours, and limit the number of customers.
But Cincinnati argues in Thursday’s brief that the restaurant’s alleged adoption of new reopening measures has not physically altered the property. And the restaurant Papi Chulo cannot say that the closing orders caused the installation of the barriers, as the decision to close was made by the restaurant, the insurer added.
“The government shutdown orders in question do not require that insured property be repaired, rebuilt or replaced or that the insured’s business be permanently relocated,” the insurer said, explaining that the orders allowed restaurants to continue to offer take-out, deliveries or drive-thru services.
Coverage from civil authorities also does not extend to losses, according to the insurer, as there was no physical loss or damage to nearby property and the restaurant was not denied access. to its location.
A total of seventeen business disruption lawsuits are pending in Oregon federal court for losses suffered by businesses during the COVID-19 pandemic, but no decision has been made on the pending petitions , according to data from the University of Pennsylvania’s COVID Coverage Litigation Tracker.
A representative for Cincinnati told Law360 on Friday that the company is not commenting on pending litigation. The insurer’s representative said the company remains committed to supporting families and businesses by “helping them proactively manage risk and pay covered claims quickly.”
Claire Howard, senior vice president and general counsel for the American Property Casualty Insurance Association, told Law360 on Friday that the organization does not comment on specific contracts or lawsuits. But those policies weren’t meant to cover illnesses or losses related to the pandemic, she said.
“Lawsuits to impose retroactive business interruption coverage to include non-contract COVID-19 losses would undermine the stability of the insurance industry and its ability to pay claims on all existing insurance policies.” Howard said.
Restaurant representatives did not immediately respond to requests for comment.
The restaurant is represented by Kyle A. Sturm and Nicholas A. Thede of Foreman Sturm & Thede LLP; Nicholas A Kahl of Nick Kahl LLC; and Craig Lowell of Wiggins Childs Pantazis Fisher & Goldfarb LLC.
Cincinnati is represented by Lloyd Bernstein and Richard Williams of Bullivant Houser Bailey PC; and G. David Rubin and Andrew K. Aaronian of Litchfield Cavo LLP.
The case is Papi LLC v. The Cincinnati Insurance Co., Case Number 3: 21-cv-00405, in the United States District Court for the District of Oregon.
–Edited by Peter Rozovsky.
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