In-N-Out Files Suit After $250 Million Pandemic-Related Claim Denied by Insurance Company

Few things draw a crowd in California like In-N-Out Burger where you can have your burger in many various “styles.” The fast food chain now wants it “lawsuit style” as it has sued corporate insurer Zurich American Insurance Company for breach of contract, saying the company is obligated to pay potentially millions of dollars for business interruption during the months-long coronavirus pandemic.

In-N-Out, along with every other restaurant in the state, was told by California governor Gavin Newsom on March 17 to close its dining rooms to help slow the speed of a novel coronavirus outbreak. The company’s drive-thru lines have remained open for drive-thru service, and have often seen extremely long lines of cars waiting for food, but its dining rooms were closed temporarily.

According to Nation’s Restaurant News, the Irvine-based privately-held restaurant company says that Zurich American erred in denying claims surrounding the pandemic, in part because the company specifically carries an “all risk” policy that specifically includes “entirely unknown and novel risks that may arise which were not previously considered by the company.” The media-shy company did not disclose the amount of the loss claim, but the lawsuit says the policy is capped at $250 million. In-N-Out claims that its insurance was denied both over the phone and in writing on May 29, sparking the lawsuit thereafter.

“It’s unconscionable that insurance companies would say ‘We have no responsibility for this,” one owner told Eater Magazine recently.

So is the pandemic “an entirely unknown and novel risk?” Looks like the courts will have to decide. Just like burger chains on the freeway, legal disputes are everywhere. And when those things negative impact YOU and YOUR business, including contract issues, nuisance ADA claims, landlord/tenant matters and even collections, call in the good guy business litigator, Dean Sperling to resolve YOUR matter with YOUR best interests in mind!

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