José Andrés, Fabio Trabocchi Among the Latest D.C. Chefs to Sue For Insurance Coverage

Restaurant groups led by José Andrés and three other high-profile chefs based in D.C. sued their insurance carriers this week, joining a growing number of hospitality companies fighting for payouts triggered by business interruption policies they claim should cover losses during the COVID-19 pandemic.

Both Andrés’s ThinkFoodGroup (TFG) and Central, the James Beard Award-winning American bistro that carries on the legacy of its late chef/founder Michel Richard, filed lawsuits on Wednesday, July 30, in Maryland and District of Columbia federal courts, alleging Travelers Insurance Company wrongfully rejected coverage for business losses during the novel coronavirus pandemic.

The lawsuits come days after Fabio Trabocchi’s Fiola Holdings and Robert Wiedmaier’s RW Restaurant Group took similar legal action against their carrier The Charter Oak Fire Insurance Company (Travelers). Michelin-rated Fiola, Fiola Mare, Del Mar and three Sfoglina locations are listed in the suit; RWRG’s filing is related to eight of Wiedmaier’s restaurants, including elegant French eatery Marcel’s in Foggy Bottom.

TFG’s lawsuit is tied to 16 of the group’s restaurants covered under the Travelers’ policy, including the Michelin-rated Minibar, Jaleo, Oyamel, Zaytinya, China Chilcano, Beefsteak and other operations. Much of the named TFG portfolio is concentrated in Penn Quarter, which has become a ghost town without hotel and foot traffic fueled by now-empty Capital One Arena. Central’s placement on Pennsylvania Avenue NW has also suffered from a loss of visitors since the start of the pandemic.

Andrés issued the following statement on behalf of his restaurant group:

“For over 22 years, our company has consistently paid considerable annual premiums for business interruption insurance from Travelers and now is the time for them to fulfill their obligation. Given that we were forced to close and the pandemic’s effects on our industry, our businesses, our team, and the local farmers and producers who rely on our restaurants, Travelers has a financial responsibility to all of us as we rebuild.”

Fiola Holdings’ complaint was filed in the United States District Court for the District of Columbia; RWRG’s complaint was filed in the United States District Court for the District of Maryland Southern Division on Friday, July 24.

Per-year policy premiums across the four restaurant groups range from around $28,000 (Central) to $456,000 (TFG). All groups claim the “government-mandated public health shutdowns” tied to COVID-19 are fair game for coverage.

All groups are repped by D.C.-based Cohen Milstein Sellers and Toll PLLC, and California-based Gibbs Law Group, which joined forces to create a COVID-19 Business Interruption Insurance Coverage Task Force to take on new restaurant and small business clients across the country that have been financially affected by insurance companies’ refusal to pay.

“It’s devastating to see Washington D.C.’s vibrant restaurant industry struggle to stay afloat from this pandemic as insurance companies rake in billions of dollars of their insureds’ premiums, refuse to pay their contractually agreed-upon coverage and idly watch their policyholders suffer,” says Cohen Milstein Sellers & Toll partner Geoffrey Graber, in a statement.

Travelers, the defendant, provided Eater with the following statement regarding the wave of newly filed lawsuits against the insurance giant:

“This is an enormously difficult situation for individuals and businesses and we are committed to paying covered claims, but we simply cannot pay for losses that a policy expressly excludes. In our standard commercial property policies that include business interruption coverage, we have very specific exclusions stating that losses resulting from a virus or bacteria are not covered. If we are going to honor our promises to policyholders for the risks they have paid premiums for and insured against, then we have to protect the integrity of our contracts.”

In early April, downtown’s upscale sports bar Proper 21 was the first D.C. restaurant to spark a legal battle over coverage as its dining rooms remained closed during the coronavirus crisis. A few weeks later, White House-adjacent grilled cheese bar GCDC filed a class action suit against insurance carrier Hartford for denying coverage of business it lost during the novel coronavirus pandemic.

While takeout and delivery has been an option since the start of the government-mandated shutdown in mid-March, D.C. restaurants and bars weren’t able to welcome back customers until Friday, May 29 (with limited outdoor seating). Phase 2 kicked in on Monday, June 22, letting D.C. restaurants seat customers indoors at half capacity.

“We feel fortunate that we have been able to hire back nearly half of our staff. But the financial losses continue to be grave and things could get much worse before this crisis is over,” Trabocchi says in a statement.

After the first version of this story published, Eater has learned a trio of Italian eateries in D.C. also just sued their shared carrier for denied business interruption coverage. Long-running power lunch spot Ristorante Tosca, Shaw’s San Lorenzo, and Union Market Distrtict’s Stellina Pizzeria filed a suit today against the Erie Insurance Group in the First Judicial District of Pennsylvania Court of Common Pleas of Philadelphia County. Here’s a copy of the complaint:

• Downtown’s Proper 21 Sues for Coronavirus Insurance Coverage [EDC]
• D.C. Restaurants Begin Indoor Seating for the First Time in Three Months [EDC]
• Downtown Grilled Cheese Bar GCDC Leads a Class Action Suit Against Hartford Insurance [EDC]
• D.C. Restaurants Can Begin Seating Customers Outside This Week [EDC]