Six Chicago bar and restaurant groups have filed a breach of contract lawsuit in federal court against their insurer, Society Insurance, alleging the firm failed “to honor its obligations” of their business interruption insurance policies by refusing to reimburse them for costs related to the temporary closure of their businesses due to the coronavirus (COVID-19)-related government-mandated shutdown, according to Eater Chicago.
“We’ve been paying our policies every month,” said Erik Baylis, owner of Big Onion Group, one of the plaintiffs in the lawsuit. “For them to come out and find a way not to pay, it’s outrageous.”
Business interruption insurance, also called business insurance, is one of the core coverages in a business owner’s policy. It is designed to help cover bills and payroll in the event of a disaster that forces the business to temporarily close. Whereas a commercial property insurance portion of the business owner’s policy covers inventory and building damage, business interruption insurance covers bills and payroll while the establishment is closed to repair those damages.
But insurers are denying claims from restaurants, bars, and hotels, claiming that the shutdown is unrelated to the shop’s commercial property insurance and, thus, is not covered by business interruption insurance.
“We are all affected and all we want to do is make sure our staff is taken care of first and then be able to open our doors up again – whenever that may be – without looking down the barrel of insurmountable debt that should be covered by our insurance companies,” said Brian Galati with Headquarters Beercade and Machine, another plaintiff in the case.
Beasley Allen Law Firm is actively pursuing these cases already with our clients who received a denial communication from their insurance companies. Dee Miles, Head of our Consumer Fraud Section, Rachel Boyd and Paul Evans are spearheading this litigation for our firm. They would like to talk to you about any potential claims.