An appellate court has ruled for the first time that an insured restaurant can seek COVID-19 shutdown damages. The Oceana Grill on Bourbon St. in New Orleans had originally lost their request to seek damages from its insurer, but that decision has now been reversed on appeal.
“The physical presence of COVID-19 substantially diminished the usable space of the property, as tables needed to be pushed farther apart, and resulted in economic losses due to the slowdown of the appellants’ business,” Chief Judge Terri Love wrote in the ruling.
Cajun Conti, the company that owns Oceana Grill, sued Lloyd’s of London for damages on the day they were shut down — March 20, 2020. They argued that COVID-19 had caused property damage by forcing it to close — and eventually reduce the amount of seating in the establishment to comply with social distancing rules.
“Oceana Grill’s parent company was one of the first, if not the first, to file a COVID insurance coverage lawsuit, though many more followed. The general consensus was that the pandemic wouldn’t qualify for business interruption assistance, as it was created to cover closures due to property damage from natural disasters. This court, however, found that the wording is open to interpretation and that physical damage did not have to be ‘obvious and observable,'” Nola reports.
One of the policyholder attorneys involved said the “dam has broken” with the ruling, paving the way for other businesses to do the same, according to a report from Reuters.