Four popular steakhouses are suing three insurance companies for allegedly breaching a contract to pay them for losses incurred while the eateries were forced to close during the coronavirus pandemic.
Saddle Ranch Chop House restaurants in West Hollywood, Valencia, Orange and Glendale, Ariz., brought the complaint Thursday in Los Angeles Superior Court against Fireman’s Fund Insurance Co., Allianz Global Corporate & Specialty and Allianz Global Risks US Insurance Co.
“Each of the plaintiffs have suffered hundreds of thousands of dollars in lost business income … resulting from the COVID-19 outbreak,” according to the suit, which seeks unspecified damages.
The insurers denied the claims on the grounds that the pandemic does not constitute “physical loss or damage,” despite the fact that their own policy identifies as an example of physical loss or damage the costs to “contain, treat, clean, detoxify and disinfect” the effects of viruses like COVID-19, according to the suit.
Representatives for the insurers could not be immediately reached for comment.
Saddle Ranch restaurants have been featured in such television programs as “Sex and the City” and “The Bachelor” and in the reality television program, “Saddle Ranch” on the VH1 network. Statewide health orders were issued in mid-March limiting restaurant service and closing bars in California and Arizona because of the coronavirus, including the four locations in question.
The restaurants have paid thousands of dollars in premiums for coverage from the insurance companies, including a coverage extension for losses resulting from an outbreak of communicable disease, including viruses, the suit states.
The four restaurants “purchased this insurance to protect against the very sort of risk that occurred here,” the suit states.
The plaintiffs made a claim for their losses on April 2, but the insurance companies responded with a “snap denial” without a meaningful investigation, according to the suit.