A popular Bunker Hill restaurant has filed suit against an insurance company to ensure there is no interruption in coverage because of the coronavirus.
Pez Cantina, located in the 400 block of South Grand Avenue, brought the complaint Monday against the Travelers Indemnity Co., seeking a court declaration that its suspension of business under a city order represents a “direct physical loss” as defined in the restaurant’s policy.
The suit states that the eatery signed a contract with Travelers on Jan. 7, with coverage effective through January 2021 that applies to the actual loss of business income when operations are suspended due to the direct physical loss of or damage to the premises.
Travelers officials could not be reached for comment on Pez Cantina’s lawsuit, but the company is also in a dispute with Los Angeles attorney Mark Geragos, who sought a court order directing Travelers to provide compensation for his firm’s reported financial losses under the shutdown order.
The insurance company has pointed out in court papers that Geragos’ policies contain a clause stating that “losses resulting from a virus or bacteria, including business income losses, are not covered.”
It was not clear if the restaurant’s policy has similar language.
On March 15, Mayor Eric Garcetti put restrictions on certain establishments, including a ban on dine-in food service, the suit states. On April 1, Garcetti issued a revised order acknowledging that COVID-19 is physically causing property loss or damage due to its tendency to attach to surfaces for prolonged periods of time, according to the suit.
On April 10, the mayor issued a further directive extending the revised order to May 15, the suit states.
Due to the mayor’s orders, the Pez Cantina completely shut down its business operations, causing a loss of income, the suit states.
According to the Pez Cantina website, management tried having takeout and delivery service, but ultimately decided the risk of spreading the virus amongst the staff, their families and guests “made it a quick and not easy decision to do what we believe was best; not be part of the problem, stay home, love and support our families and loved ones throughout this very surreal time.”