Rare victory for S.F. restaurant that sued insurers for $20 million in pandemic losses

John’s Grill, home of long martini lunches and lamb chop dinners in San Francisco, has settled an insurance lawsuit with a very rare victory in a nationwide search of restaurants trying to get their insurers to cover business losses incurred during the lockdown COVID-19 arose.

The terms of the settlement were not disclosed, but attorney Joe Cotchett, the attorney representing John’s Grill, said the payout to the restaurant was “substantial.”

Cotchett filed a federal lawsuit on behalf of John Konstin, the owner of John’s Grill, which has been located just off Market Street for 114 years, against the restaurant’s insurer — Hartford and its subsidiary Sentinel Insurance Co.

The settlement is touted as one of the first victories against a major insurer over business disruption related to COVID-19. These claims have regularly been rejected in courts because the losses suffered by the companies were not physical. That’s even as both the California Supreme Court and the state’s First Circuit Court of Appeals have sided with insurers by denying pandemic-related business loss claims.

Earlier this week, the Ohio Supreme Court ruled that insurance companies are not liable for claims for lost business revenue due to a government-ordered shutdown. The decision stated that the temporary loss of use of a property does not constitute material damage.

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