The Berkeley restaurant is filing a suit against its insurer AMCO, for denying coverage for losses resulting from the government-mandated shutdowns. Owner and founder Waters said in a statement that “Chez Panisse spent years paying hefty premiums for business interruption insurance and AMCO has an obligation to help provide economic relief to my team and restore the wide-ranging supply chain of small farms and businesses that Chez Panisse relies on to provide fresh and local cuisine.”
Waters joins the likes of Thomas Keller in suing for loss of earnings. Some of the biggest names in the US restaurant industry joined forces in April to create the Business Interruption Group, to lobby for the government to lean on the insurance industry to do the right thing.
Since the beginning of the crisis insurance companies, even those who have accepted premiums to cover business interruption, have invoked ‘force majeure’ to wriggle out of mass payments over the pandemic. Industry spokesmen have claimed that mass payments of business interruption claims would be so vast as to destabilise the entire industry with catastrophic economic implications.
"Unaffordable or even unavailable"
In a statement sent to the San Francisco Chronicle, a spokesperson for Nationwide Mutual Insurance Company (of which AMCO is a subsidiary) said “we are committed to doing all we can within the coverage our members have purchased,” but that “business interruption coverage due to a virus outbreak has been excluded from standard policies issued to business owners across the insurance industry for quite some time. The risk for such an event is so vast, including it in standard coverage would make such coverage unaffordable or even unavailable.”
So far, efforts to force the insurance companies to pay out have come to nothing, despite the likes of Keller, Wolfgang Puck and Jean-Georges Vongerichten having special access to President Trump. These cases will have to run their course and may come down to the minutiae of each individual policy contract. However, time is not a commodity small businesses have at the moment, and it would be very difficult to recover payment once a business ceases to exist.