VA restaurant sues insurer over denial of COVID-19 business interruption claim

A restaurant serving Mexican food in Arlington, VA is suing its insurer over the company’s denial of business interruption claims related to COVID-19. Rolando Juarez, the owner of Guajillo Mexican, filed the lawsuit this week in Arlington Circuit Court against Twin City Fire Insurance – a member of the Hartford Insurance Group. According to the lawsuit, the restaurant’s policy “explicitly covered such loss when caused by a virus, including the salaries and other expenses owed.” “The policy explicitly provides for loss due to a virus through an endorsement: ‘We will pay for loss or damage by “fungi”, wet rot, dry rot, bacteria and virus,’” the lawsuit outlined. “Twin City’s refusal of coverage breached its obligation and responsibility to provide coverage available through the policy to Guajillo due to its covered loss of business income because its premises are unusable and uninhabitable and have lost all function, which constitutes a direct physical loss under the policy.” Guajillo’s policy also defined a “period of restoration,” which “begins with the date of direct physical loss or physical damage caused by or resulting from a covered cause of loss at the ‘scheduled premises’,” the lawsuit added.