Restaurant Management Group is the latest in a raft of restaurant groups nationwide suing their insurers for not paying out for pandemic-related losses — some, like the fast food chain In-N-Out, Wendy's and TGI Friday's are also insured by Zurich.
Courts around the nation, however, have heard and tossed cases over restaurant coronavirus loss coverage, including one in Georgia, ruling that the plaintiffs did not show they experienced physical loss or damage to their properties.
"What differentiates Zurich's policies from any others is the fact that they afford coverage for business losses or damages attributable to microorganisms," Bob Persons of Lindsey & Lacy PC told Law360, adding that he was hopeful the argument for the restaurant group he represents will be "sufficient ground" to get past the typical motion to dismiss.
"While a virus isn't like a tree, it's microscopic, and it could come into your business potentially any time a group of people are in there eating or drinking — you can't see it, but it certainly has a physical presence."
RMG said that its restaurants had no control over the closures mandated by the Georgia state government starting in early March and that the shutdowns caused some of the eateries to close permanently.
Persons said restaurants were in a particularly tight situation, because, unlike people shopping in a grocery store, restaurant and bar customers cannot wear masks while eating or drinking.
"Beyond that, in order to deal with it, restaurants are having to remove tables and chairs, reduce seating capacity and sometimes put in these clear plastic barriers that you now see in a lot of places, so in that sense, there is physical change in the condition of the restaurant," Persons said.
Einstein's, Joe's on Juniper, Metrotainment Bakery, Sugar Shack and six Hudson Grilles throughout Atlanta are all named plaintiffs in the suit alongside their restaurant management company.
Representatives for Zurich did not return requests for comment at time of publication.
Restaurant Management Group is represented by W. Thomas Lacy Jr. and J. Robert Persons of Lindsey & Lacy PC.
Counsel information for Zurich American Insurance Company is not yet available.
The case is Restaurant Group Management LLC v. Zurich American Insurance Company, case number 20-A-07299-6 in the Superior Court of Gwinnett County, State of Georgia.
--Editing by Peter Rozovsky.
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