6 restaurants, a gym sue insurance companies that won’t pay claims over COVID losses

Ruben Onsu

Six restaurants and one fitness center in New Jersey have filed a lawsuit against six insurance companies for breach of contract, saying financial losses incurred during the coronavirus pandemic were not covered by insurance but should have been. The lawsuit, filed in Superior Court of Bergen County, states the businesses […]

Six restaurants and one fitness center in New Jersey have filed a lawsuit against six insurance companies for breach of contract, saying financial losses incurred during the coronavirus pandemic were not covered by insurance but should have been.

The lawsuit, filed in Superior Court of Bergen County, states the businesses entered into “all-risks” contracts of insurance and paid their “substantial annual premiums” and should have been covered for losses associated with COVID-19.

But the insurance companies reneged on promises to “to protect the plaintiffs from losses and catastrophes, including the interruption or closure of their business operations,” the suit states.

“The plaintiffs have made claims for coverage relating to business income losses caused by a covered interruption of their business operations and all of these claims have been denied by the insurers,” the suit states.

All of the businesses claim to have sustained serious revenue losses when Gov. Phil Murphy signed executive orders “that required the closing of the restaurants and fitness centers,” the suit states.

The businesses say the insurance companies told them coverage for their losses is unavailable because none of their properties suffered physical damage, the lawsuit states.

“On the contrary, the executive orders and directives issued by the state of New Jersey (recognize) that the coronavirus contaminates objects and surfaces within buildings and that this contamination in part is the reason the shutdown has been ordered,” the lawsuit states.

The businesses named as plaintiffs are: Brookside Banquets of Bloomfield; Biagio’s Ristorante of Paramus; Fiesta Banquets of Wood-Ridge; Redds of Carlstadt; Redd’s Biergarten of Newark; Redd’s Biergarten of New Brunswick; and The Gym Lakewood.

The insurance companies listed as defendants are Selective Insurance Company, Western World Insurance Group, Liberty Mutual, American Automobile Insurance Company, Axis Insurance and Philadelphia Indemnity Insurance Companies.

Richard Angevine, spokesman for Liberty Mutual, said the company “does not publicly discuss matters in litigation.” The other insurance companies did not immediately respond Tuesday morning to requests for comment.

The lawsuit is one of several filed in state and federal court against insurance companies by New Jersey businesses claiming they suffered big losses during the shutdown but can’t collect on their insurance policies.

One of the biggest claims was made earlier this month by RWJBarnabas Health, which says they are owed $2.5 billion in claims from Zurich American Insurance Company.

Recently, a federal judge dismissed a lawsuit filed by Toms River car dealer Downs Ford, which claimed Zurich owed for businesses losses during the pandemic. In his ruling, the judge stated Zurich clearly had a “virus exclusion” written into the dealer’s policy.

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Anthony G. Attrino may be reached at tattrino@njadvancemedia.com. Follow him on Twitter @TonyAttrino. Find NJ.com on Facebook.

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