Search
Close this search box.
Search
Close this search box.
Search
Close this search box.

COVID-19, Business Insurance, & the Restaurant Industry

In the interests of public health and safety, many states, including California, have issued stay-at-home orders that shut down non-essential businesses. While these measures are necessary for saving human lives by curbing the transmission of the coronavirus, they have had a devastating effect on the economy.

The restaurant industry, in particular, has been hard hit. Since the start of the COVID-19 outbreak in the U.S., over eight million restaurant workers have been laid off or furloughed. In addition, the National Restaurant Association has predicted that the restaurant industry alone will lose approximately $80 billion in sales by the start of May 2020.

The restaurant industry in the U.S. has never been faced with such a monumental challenge, and when this industry takes a hit, so too does the entire country. The industry contributes about $900 billion to the economy annually and employs well over 15 million people. In short, what is bad for the restaurant industry is bad for the country as a whole.

So, what can be done about this problem? Some restauranteurs are turning to their business interruption insurance for the answer. Filing California coronavirus business interruption insurance claims are thought to provide a way for restaurants to bridge the gap while waiting for the COVID-19 pandemic to resolve.

Can California coronavirus business interruption insurance claims help?

Every business needs at least one type of insurance. One smart policy for restauranteurs to purchase is business interruption insurance. It’s intended to replace the lost income and extra expenses caused by covered perils. Restaurant owners have traditionally used business interruption insurance to help them survive damage due to theft, fire, lightning, floods, and similar disasters.

Now, an increasing number of restaurateurs are turning to their business interruption policies in hopes they will consider the coronavirus to be a covered natural disaster. And when those claims are denied, there is a possibility of pursuing litigation against the insurance carrier to secure coverage.

California requires insurance carriers to investigate all COVID-related claims

On April 14, the California Department of Insurance released a statement regarding the restaurateurs filing coronavirus-related claims against their business interruption insurance policies. Insurance Commissioner Ricardo Lara stated that his department had issued a notice that requires insurance companies to comply with all contractual and legal obligations, and to “fairly investigate all business interruption claims caused by COVID-19.”

This statement came on the heels of multiple complaints Lara’s department has received from businesses and similar stakeholders. They claimed that various insurance representatives were attempting to discourage policyholders from filing claims because of COVID-19.

Other policyholders have reported that their insurance carriers have outright refused to initiate or to proceed with coronavirus-related business interruption claims. Commissioner Lara’s statement is promising for restauranteurs in California who have been forced to shut their doors and lose income due to COVID-19.

Legal recourse for restauranteurs with denied claims

Unfortunately, restaurant owners in California still can’t rely on their insurance carriers to do right by their claims. Restauranteurs who have filed California coronavirus business interruption insurance claims and have been denied (or have had their insurance carrier refuse to initiate a claim) may have avenues for legal recourse. Filing a lawsuit may be a viable solution.

Law offices across the country are expecting a wave of restaurant owners to file these types of lawsuits against insurance carriers, given the sheer scale of the economic losses the industry has suffered. One of the first restaurants is the Oceana Grill, located in New Orleans, Louisiana. The Oceana Grill filed its lawsuit against insurer Lloyd’s of London.

The complaint notes that the plaintiff’s insurance policy has coverage for the interruption of business by order of civil authority, and the lawsuit asserts that the government mandate to close non-essential businesses falls into this category.

Schedule a business interruption insurance consultation today

In Los Angeles and throughout Southern California, Salamati Law has acquired a reputation for vigorously defending the legal rights of its clients and aggressively pursuing favorable resolutions on their behalf. We have been providing legal representation to individuals in the area for two decades. If your restaurant has suffered a loss of income due to COVID-19, and you are attempting to file a business interruption insurance claim as a result, you can find the strategic guidance you need at the Salamati Law.

Contact us today to request a free initial consultation with a results-focused attorney. We are currently accepting new business clients who grossed $200,000-plus per month before the coronavirus outbreak. A Los Angeles business interruption insurance lawyer will review your case and advise you on the merits of pursuing litigation.

No Obligation, No Fees Guaranteed, Unless We Win

We are committed to negotiate your case aggressively, strategically and creatively. Personal injury lawsuits are retained on a contingency fee agreement, and plaintiffs will pay no legal fees unless the firm is able to recover damages on your behalf.

No Fee Guarantee Unless We Win
Don’t Wait,
Get Your Life Back
Call now to schedule your FREE consultation. No obligation to you.
We’re available 24/7 & are multilingual speaking
Call For Your
Free Case Evaluation
Available : 24/7
Se Habla Español
Or leave a message below for your earliest convenience