A metro Detroit restaurant group has filed a lawsuit against its insurance company for refusing to payout for pandemic and electrical fire-related claims, the Detroit News reports.
Dino Drop Inc. owner Dean Bach operates Dino’s Lounge and M-Brew in Ferndale as well as a third restaurant, Belle Iron Grille, in Gaylord, Michigan. Dino Drop Inc. filed the complaint on Wednesday, September 16, in federal court against Cincinnati Insurance Company. It states that the restaurant group filed more than $75,000 in claims during the pandemic that resulted in economic losses due to temporary closures and limitations on restaurant dine-in service. Dino Drop argues its “all-risk commercial property insurance policy” provides coverage for such damages. However, Dino Drop’s claims were denied.
“The Policy did not have virus exclusions and exemplifies the broken promise from insurance companies across the country,” the complaint states.
In addition to pandemic-related closures that began on March 15, Dino Drop Inc’s filing also details other virus-related issues at the facilities including an allegation that an outbreak took place at Belle Iron Grille in Gaylord, after visiting band members potentially exposed customers and employees to COVID-19. In another incident several cases were identified at Bach’s Ferndale restaurants and employees expressed concerns about coming to work.:
It is likely customers, employees, and/or other visitors to the insured properties over the months prior to, during, and after the government shutdown were infected with the coronavirus and thereby caused physical loss and damage to the property. Specifically, several of Plaintiffs’ employees and customers tested positive for COVID-19, which were believed to be a result, in part, of their exposure to band members who played at Plaintiffs’ restaurant. Said band Case 2:20-cv-12549-MAG-RSW ECF No. 1 filed 09/16/20 PageID.12 Page 12 of 57 13 members tested positive for COVID-19 a few days after playing at the restaurant
A letter from Cincinnati Insurance Company denying the claim states that the coverage only covers “direct physical loss or damage to Covered Property at the premises.” The filing argues that Michigan law states that “loss” can be more than just physical damages, but also claims that documented exposure to aerosolized droplets — believed to be one of the key modes for transmission of COVID-19 — are an example of physical damage.
Dino Drop is also seeking compensation for claims related to an electrical fire that took place at Dino’s Lounge on Tuesday, August 18, before company’s Cincinnati Insurance policy expired.
Dean Bach isn’t alone in seeking and being denied some sort of relief from insurance companies during the novel coronavirus crisis. Restaurant owners big and small across the country are suing their insurance providers over COVID-19 loss. They include companies like In-N-Out Burger in California and a group of unaffiliated restaurants in Chicago’s Logan Square.
• Ferndale Restaurant Owner Sues Insurance Company for Not Covering COVID-19 Related Losses [Detroit News]
• The Ugly Legal Battle Over Restaurant Insurance Has Begun [E]
• All Coronavirus Coverage [ED]