March 17, 2020 (New Orleans, Louisiana) A French Quarter restaurant is among the first businesses in the nation to seek judicial determination that its “all risk” policy provides coverage for losses related to COVID-19. Oceana Grill, a well-known, high capacity French Quarter seafood restaurant filed suit in Civil District Court for the Parish of Orleans seeking declaratory judgment that an “all risk” policy issued by Certain Underwriters at Lloyd’s, London provides coverage for all causes of “direct physical loss” of premises use unless specifically excluded. In the lawsuit, styled Cajun Conti LLC, Cajun Cuisine 1 LLC and Cajun Cuisine LLC d/b/a Oceana Grill v. Certain Underwriters at Lloyd’s, London and Governor John Bel Edwards asserts the spread of Coronoavirus, and contamination therefrom, constitutes a real physical loss and physical damage will result. Plaintiffs further argue that the policy’s only exclusion relevant to biological materials, such as COVID-19 pathogens, requires the pathogens to be dispersed in connection with terrorism or malicious use and is therefore inapplicable to loss resulting from COVID-19 losses.
The lawsuit also names as defendant Louisiana Governor John Bel Edwards, who issued directives effectively shuttering all bars and restaurants for the foreseeable future in an effort to combat spread of the virus. Plaintiffs also seek declaratory judgment that that the restrictions trigger the policy’s civil authority provision, which generally would apply to business interruption losses where a government entity denies access to the insured property.
The directives and resulting closures, which have placed a significant burden on New Orleans and Louisiana businesses, will likely result in significant litigation as policyholders and their insurers navigate this uncertain terrain.