At
the close of business on Monday, March 16, 2020, thousands of restaurants and
bars in Illinois were forced to close to dine-in customers.
“I
mean it was definitely very difficult, our busiest week of the year is that
specific week. St Patrick’s Day corned beef, especially in Chicago, it’s our
busiest time so we had pre ordered 10,000 pounds of meat, and when you order
that like you’re stuck with the meat. So it went to waste,” Dan Raskin,
owner of Manny’s Deli, told NBC 5 Responds.
The
South Loop restaurant has been open for 78 years and is often the scene for
glad-handing by politicians running for office. But as part
of the shutdown order, no customers were allowed inside, and Manny’s famous
sandwiches were available only for carry out.
“Typically
90% of our business is dine-in business. To get people to shift from dine-in to
carryout is not very easy,” said Raskin.
Raskin
applied for the Paycheck Protection Program, or PPP loan, to help pay staff and
keep them employed while business dropped as much as 80%.
To
offset other losses and costs for items such as personal protective equipment,
Raskin, like thousands of other business owners across the country, filed a
claim with his insurance company, hoping the huge premiums he’s paid for an “all-risk”
policy, would pay off.
But
he says a denial came immediately, with no investigation.
He’s not alone. At least 42 other owners of bars and eateries,
Including prominent Chicago
restaurant groups Lettuce Entertain You and Gibsons, experienced the
same denials and are all now suing their insurance carriers over their
“all-risk” coverage.
“They
are what it sounds like. All-risk policies cover everything…they exclude
some things that are specifically excluded,” said attorney Gabriel Gillett, of
Jenner & Block, counsel for the plaintiffs.
According
to their lawsuit, in denying coverage, “Defendant Insurers contend that
Plaintiffs did not sustain ‘direct physical loss’ or ‘damage to’ property
within the meaning of the Policies”.
“It is. It is a physical loss
though because when you’re physically not able to use the dining room,” says
Raskin.
Illinois Department of Public Health guidelines state
that in Phase 4 or reopening, Illinois businesses may offer indoor and
outdoor on-premises food and beverage consumption. All businesses must maintain
social distancing measures and provide a minimum of 6-feet between
tables. And the maximum occupancy for indoor standing areas is 25%
capacity.
“As soon as dining rooms were
closed, and they had to put up physical barriers, alter restaurants,
essentially rendering our restaurants nonfunctional, that’s when we’re damaged,
and at that point, that’s when insurance should have recognized that we
suffered physical loss as a result of those orders, and paid our claims,” says
attorney Gillett.
The American Property Casualty Insurance
Association, which speaks for the insurance industry, responded to the NBC5’s
request for comment.
“Business
interruption insurance refers to property insurance policies that cover
physical damage, such as from wildfires and tornados. These policies are not
intended to cover diseases, or pandemic related losses”, writes Stef
Zielezienski, Executive Vice President at APCIA.
She
adds, “In the vast majority of cases, insurers did not price policies to
include such coverage, and policyholders did not pay premiums to have this
coverage”.
Now
with fall around the corner, and outdoor seating diminishing, business owners
worry about another dip in business.
“We’ve been working on
trying to stay open and going along, but we’re hoping that the insurance
companies make us whole and do what we paid for,” says Raskin. …
Read More: ‘Millions in Losses:’ Empty Dining Rooms Land Restaurant and Bar Owners in