Southern California-based fast food chain In-N-Out is suing its corporate insurer Zurich American Insurance Company for breach of contract, saying the company is obligated to pay potentially millions of dollars for business interruption during the months-long coronavirus pandemic. In-N-Out, along with every other restaurant in the state, was told by California governor Gavin Newsom on March 17 to close its dining rooms to help slow the speed of a novel coronavirus outbreak. The company’s drive-thru lines have remained open for drive-thru service, and have often seen extremely long lines of cars waiting for food, but its dining rooms were closed temporarily.
According to Nation’s Restaurant News, the Irvine-based privately-held restaurant company says that Zurich American erred in denying claims surrounding the pandemic, in part because the company specifically carries an “all risk” policy that specifically includes “entirely unknown and novel risks that may arise which were not previously considered by the company.” The media-shy company did not disclose the amount of the loss claim, but the lawsuit says the policy is capped at $250 million. In-N-Out claims that its insurance was denied both over the phone and in writing on May 29, sparking the lawsuit thereafter. The company currently operates over 300 locations across six states: California, Oregon, Nevada, Arizona, Texas, and soon in Colorado.
Back in March, celebrity fine dining chef Thomas Keller sued his own insurance company, Hartford, for denying claims surrounding COVID-19 business losses. The French Laundry owner has been public about his lawsuit, hoping that the legal ruling would aid others in future insurance lawsuits within the restaurant industry. Many prominent restaurant groups and chefs, like Colorado’s Bobby Stuckey of Frasca Food & Wine, have been vocal about their claim denials in the face of government-mandated public health shutdown. “It’s unconscionable that insurance companies would say ‘We have no responsibility for this,” one owner told Eater recently.