US Restaurant Wins Legal Battle To Recover Damages For COVID Lockdown Losses From Lloyd’s

    US restaurant wins legal battle to recover damages for COVID lockdown losses from Lloyd’s. The judgment on June 15 lends reason for optimism that businesses and the legal profession are beginning to turn the page.

    US Restaurant Wins Legal Battle To Recover Damages For COVID Lockdown Losses From Lloyd's

    A well-known seafood restaurant in New Orleans, Oceana Grill, has won a groundbreaking court case in which it had been fighting for years to be compensated by insurer Lloyd’s of London for lost sales during the COVID-19 lockdown that started on March 20, 2020.

    On June 15, a Louisiana state court overturned a previous judgment and granted the damages claim made by Cajun Conti LLC, the business that owns Oceana Grill.

    On the day the shutdown began in March 2020, Cajun Conti filed a lawsuit to recover damages under its insurance contract with Lloyd’s of London. However, the first attempt at the action failed. In February 2021, underwriters representing the insurer got a favorable ruling from a state court, dismissing the plaintiff’s motion for declaratory relief in the first trial of its sort.

    The June 15 ruling is extremely important for firms seeking compensation for the frequently enormous and debilitating income losses they experienced when they were forced to scale back or stop operating entirely when COVID-19 swept the nation in the early months of 2020.

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    The June 15 decision, however, does not necessarily mean that all of these companies will now be permitted to pursue claims that insurers and courts had previously rejected.

    According to John Houghtaling, a name partner at the Metairie, Louisiana-based law firm Gauthier Murphy & Houghtaling, which represented Cajun Conti in the litigation, it is more likely to benefit the minority of businesses whose insurance policies do not include exclusions for the contamination of buildings and food.

    “I’m not surprised at all by the ruling. The evidence presented at the trial was very compelling,” Houghtaling said.

    He pointed out that Cajun Conti’s lawsuit is the only one of its sort to have gone to trial thus far. The fact that the plaintiff’s attorney was able to provide proof that the underwriters trying to defend Lloyd’s of London against the claim were lying, he noted, distinguishes this case from other prospective suits over COVID-related damages.

    According to evidence provided by Houghtaling, more than ten years prior to the outbreak of COVID-19, representatives of the Insurance Services Office (ISO) met with insurance commissioners from all over the country, including some from Louisiana, and acknowledged that insurance policies for business interruption do cover the risk of viral contamination of buildings and the food they house.

    “They specifically described how viruses can contaminate buildings, how they can contaminate food sources in buildings, and they stated to insurance commissioners that this incurs business interruption losses. They stated all this more than a decade before COVID-19 happened,” Houghtaling recalled.

    He calculated that a contamination exemption is included in around 80% of commercial insurance contracts in the US, but in the instance of Houghtaling’s customer, there was no such exemption.

    “This was a policy that did not have the exclusion, and we presented evidence that they admitted this years ago,” he said.

    Understanding What Is Covered

    Houghtaling believes that it is essential for the businesses that do have a claim to come forward, even while he acknowledged that the majority of businesses may not be able to pursue successful cases for business interruption claims based on the policies they held when COVID-19 occurred.

    Lack of detailed knowledge of the contents of insurance policies contributes to the problem.

    “Unfortunately, not many people know this evidence exists, and not many courts know it exists. We’ve been getting these adverse rulings across the country, because litigants don’t know that the evidence is out there, and cases were thrown out because plaintiffs weren’t able to do discovery,” he said.

    But the judgment on June 15 lends reason for optimism that businesses and the legal profession are beginning to turn the page.

    “My hope is that other courts around the country start giving plaintiffs their day in court, because if they do, discovery will come out proving that the position of the insurance carriers in this matter has been a complete and utter sham,” Houghtaling said.

    “They know they’re not telling the truth. They know that they admitted that contamination is covered under policies unless it’s excluded,” he added.

    A spokeswoman for Lloyd’s of London stated, “I’m sorry but we can’t comment on litigation.”

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