Chicago restaurants score early victory in court in bid for COVID claims

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Unlike many other insurers, the company’s policies did not include language that explicitly excluded the impact of a pandemic like COVID-19. Commercial insurers across the country, whether or not their policies included pandemic exclusions, have fought numerous lawsuits filed for business interruption payments, arguing that insurance is not intended to cover such significant risks. and extended.

But in court, political language is usually what counts, and the company is particularly at risk because its policies provided no pandemic exclusions.

In addition to rejecting the company’s decision to dismiss the parties to the business interruption lawsuits, Judge Chang also upheld the plaintiff’s claims that the company acted in bad faith by preemptively denying the claims before even if they were made at the start of the pandemic.

“Specifically, according to the plaintiffs, the March 16 and 27, 2020 memoranda issued by the company, which denied coverage at all levels, allegedly misrepresented the true scope of the insurance policies; The company failed to investigate individual claims, as required, and instead issued hasty denials not based on individual claims; and the company’s actions have caused undue and prolonged delay in receiving payment,” Chang wrote in his opinion.

“The need for more factual development precludes a dismissal of the claim at the oral argument stage,” he wrote.

A finding of denial in bad faith would greatly increase the potential damages.

In an email, the company said it would continue to fight the lawsuits.

“The company is disappointed that the court allowed the business interruption coverage claims to survive the first motions to dismiss and summary judgment,” said Rebecca Kollmann, corporate marketing manager. “The company is exploring its options. This is a first preliminary ruling which does not resolve the merits. The company will continue to vigorously defend its interests in the litigation.

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