Protégé — the Michelin-starred Palo Alto restaurant owned by chef Anthony Secviar — is the latest high-profile restaurant to join the growing group of operators suing their insurance companies for denying business interruption insurance claims in response to COVID-19-related restaurant closures. Protégé Restaurant Partners is part of a proposed class action lawsuit filed Tuesday in the United States District Court in the Northern State of California against Sentinel Insurance company — a subsidiary of the Hartford Insurance Company — for breach of contract.
According to the lawsuit, the insurance company is denying all policy claims related to COVID-19 business shutdowns, citing virus policy exclusions. However, the plaintiffs’ attorneys argue in the lawsuit that the policy in question is supposed to cover “interruption of business by a civil authority, necessary suspension of operations,” and all expenses incurred due to the business interruption.
The lawsuit — like many similar previous lawsuits — claims that government-ordered business closures falls under these categories and that the plaintiff’s policy does not “does not exclude or limit coverage for losses from viruses or communicable diseases like COVID-19 in these circumstances, nor does it contain a pandemic exclusion clause.”
“Our client purchased this policy as insurance against losses that the complaint alleges the carrier is required to pay,” Steven Sklaver, a partner at Susman Godfrey, the law firm representing the case said. “Unfortunately, despite pocketing substantial premiums for coverage, when it came time to live up to their end of the insurance bargain, Sentinel refused to ease the financial burden suffered by Protégé and the other businesses affected by COVID-19.”
Plaintiffs are seeking damages for breach of contract, as well as declaratory and injunctive relief.
Although the Sentinel Insurance Company did not respond to request for comment in time for publication, Christopher Swift, chairman and CEO of parent company Hartford Insurance Company, recently defended the company’s strict policy refusals to pay out COVID-19-related business interruption claims in a CNN Business Op-Ed published on June 1. He stated that pandemics are not covered by business interruption insurance principles because “you can't define, pool or price risk for something that affects so many, all at once, for an indefinite period.”
Protégé joins the growing number of operators with similar claims pending in court, including chef Thomas Keller, who helped form advocacy organization the Business Interruption Group in April to demand that chefs and restaurant groups be paid for their business interruption insurance claims.
Susman Godfrey did not respond in time to request for more comment on the pending litigation.
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