Two Philadelphia restaurants are vying to be the lead plaintiffs in business interruption insurance coverage litigation related to government-ordered coronavirus shutdowns.
The restaurants, River Twice Restaurant and Chops, filed separate lawsuits against Admiral Insurance Group units demanding that the insurer provide business interruption coverage. The two companies April 20 asked that nine other cases from around the country be consolidated into multi-district litigation in the U.S. District Court for the Eastern District of Pennsylvania.
River Twice and Chops Tuesday sought to add five more cases to the proposed multi-district litigation.
The cases originally were filed in the U.S. District Courts for the Eastern District of Pennsylvania, Northern District of Illinois, Southern District of Florida, Southern District of New York, Eastern District of Wisconsin, Northern District of Ohio, Central District of California, District of Oregon, Northern District of Texas, Northern District of Alabama, the Middle District of Florida, the Southern District of Ohio and the Southern District of Texas.
State and local governments around the country beginning in March ordered nonessential businesses to close to slow the spread of Covid-19, the disease caused by the coronavirus. Most restaurants weren’t ordered to shut down, but were restricted to only offering takeout and delivery.
Insurance companies say they don’t have to provide coverage because virus and pandemic exclusions were included in business interruption policies. Such exclusions are common in business interruption coverage.
Only two of 84 companies offering business interruption policies in Washington state included viral outbreaks in their basic coverage, while 15 more included such coverage at an additional cost, according to an April 17 report from state insurance regulators.
Businesses argue that they should be covered under civil authority provisions, which will be the crux of most of the litigation.
Many insurance professionals expect that federal litigation over business interruption ultimately will be consolidated in an MDL because, while many of the policies are unique, the questions posed in the litigation present common problems.
The case is IN RE: COVID-19 Business Interruption Protection Insurance Litigation, E.D. Pa., MDL No. 2942, Subsequent Motion to Transfer 4/21/20.