• The restaurants range from high-end eateries to bagel shops
  • They argue pandemic guidelines have forced them to reconfigure their space
  • Insurers claim they don't have to pay damages for coronavirus because their policies preclude pandemic coverage and damage has to be physical

More than four dozen New York restaurants are suing their insurance companies, attempting to gain relief from coronavirus damages. The suit alleges the restaurants suffered physical losses because they had to partially reconstruct their properties to comply with pandemic guidelines.

Business Insurance reported Tuesday the suit was filed by 50 restaurants, from fine dining establishments to bagel shops, and names 27 insurance companies. A similar suit was filed last week by Lettuce Entertain You and other eateries in Chicago.

Insurance companies have been balking at reimbursing businesses for coronavirus losses, maintaining clauses that preclude pandemics render the claims invalid.

The latest suits, however, argue the businesses are owed coverage under all-risk commercial property policies for both lost income and extra expenses.

“They had to physically manipulate tables, chairs, and other equipment into less functional arrangements; install plexiglass or other makeshift barriers to prevent congregation; place markers on the floor or walls to indicate six-feet of separation; and redesign routes for entrance and exit,” the suit argues.

A suit filed earlier in Michigan by the owner of two small restaurants resulted in a ruling in favor of Michigan Insurance Co. Gavrilides Management Co. operates Soup Spoon Café in Lansing and The Bistro in Williamston.

Judge Joyce Draganchuk ruled coverage required that damage had to be something that physically altered “the integrity of the property.”

The Chicago suit was against 18 insurers. The 42 plaintiffs argue the pandemic had “rendered [their establishments] physically nonfunctional.”