Salvatore’s Italian Gardens, a four-generation hospitality group in Buffalo, New York, and two affiliated hotel operations, are taking their insurer, Hartford Fire Insurance Co., to court to settle a dispute related to losses the businesses suffered due to the COVID-19 closures, according to the Buffalo News.

The lawsuit, filed in federal court in Buffalo, involves three businesses:

  • Salvatore’s Italian Gardens, which closed March 13 and furloughed 222 employees.
  • Garden Place Hotel, which closed March 16 and transferred guests and contracts to its associated Delavan Hotel. The Garden Place also furloughed 78 employees.
  • The Delavan Hotel, which has remained open but its operations have been “significantly restricted” to comply with state’s orders.

Salvatore’s plans to reopen June 15 at limited capacity with no banquets or groups of more than 10. The Garden Place Hotel opened earlier this month and brought back about half of its employees.

Salvatore’s made a claim on its business interruption insurance with Hartford to cover payroll and other operating expenses while its restaurants and hotels had to temporary close or scale down business due to state- and local-mandated closures to stop the spread of the coronavirus. Hartford rejected Salvatore’s claims, saying virus-related closures are not covered under the company’s policy.

Business interruption insurance is part of business owner’s policy. It provides coverage of payroll, bills, and other operating expenses if the business is forced to close its doors temporarily due to a disaster, like a fire or tornado. Hartford claimed in its denial-of-coverage letter that because the businesses experienced no direct physical loss or damage, “there is no coverage available.”

Salvatore’s lawsuit argues that its losses were caused by closures and restrictions imposed by the state, and thus should be covered.

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.

Contact us for a free consultation regarding your business interruption insurance claims.

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