NY choose dismisses restaurant chain's COVID-19-BI lawsuit

A New York judge has agreed to appeal against a unit of Swiss Re Ltd. by a Dallas-based restaurant chain.

Judge Jennifer G. Schecter of the New York Supreme Court in Manhattan on Wednesday dismissed Consolidated Restaurant Operations Inc. v Westport Insurance Corp. in a unilateral disposition.

Consolidated Operations said in a complaint filed in August 2020 that it operates 27 full-service and 27 franchise restaurants in 12 states and the United Arab Emirates. It was said to have purchased "all risks" business interruption insurance from Westport for $ 50 million per event.

The complaint against Westport had "given all indications that losses due to the pandemic will not be covered. Their main position is that neither the virus nor the accompanying illness will result in physical loss or property damage, as this terminology is insured in the all-risk policy. "

"This position contradicts the simple meaning of cover language and case law in New York and across the country, which interpret the same or a similar language," said the chain in its complaint, which accused the insurer of breach of contract.

Westport said in a lawsuit in court in May that 16 New York courts, including four state and 12 federal courts, “have unanimously concluded that given the actual or suspected presence of COVID-19, a dismissal is entirely appropriate "Direct physical loss or damage" is sufficient to trigger coverage. "

Last month, a New York federal district court dismissed a COVID-19 business interruption lawsuit filed by a New York health care system against units of American International Group Inc. and Allianz SE on the grounds that the losses were not due to direct physical loss or as necessary Damage was caused by the cover.

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