Irvine, California-based In-N-Out Burger joined a growing list of businesses across the country that have filed lawsuits against their insurance companies for refusing to honor business interruption claims due to government-mandated shutdowns to stop the spread of the coronavirus.
In-N-Out Burger filed a breach of contract lawsuit on May 29 in California federal court against its insurer, Zurich American Insurance Co. The company says it suffered “significant losses” when it was forced to shut down its fast food restaurants across the country.
In April, the restaurant filed a claim against its business interruption insurance, a part of a business owner’s policy that provides coverage for payroll, bills, and other operating expenses in the event the business has to temporarily close due to a disaster.
For example, if a restaurant suffered a fire and had to close to repair damages, the restaurant’s business owner’s policy’s commercial property insurance will pay to make repairs to the building and replace inventory damaged. The business interruption portion of the policy would cover operating expenses until the restaurant reopened.
In-N-Out Burger’s policy with Zurich has a $250 million limit. But the restaurant chain received nothing from Zurich. A senior employee with In-N-Out said Zurich’s investigation was “limited to a short email containing a handful of questions regarding COVID-19 diagnoses and the amount of loss.” Zurich denied coverage on May 29, and on that same day In-N-Out filed its lawsuit.
Several restaurants and other businesses across the country have filed similar lawsuits against their insurance companies claiming they have paid on their business owners policies for years and are entitled to coverage for business interruption.
Many small business owners are fighting back and filing lawsuits against their insurance companies for denying coverage they believe they are entitled to. Beasley Allen is actively pursuing cases with clients whose insurance companies denied their business interruption claims. 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.