Award-winning Raleigh chef is the latest to sue insurance company for COVID losses
Raleigh chef Ashley Christensen filed a federal lawsuit Monday seeking COVID-19 coverage from her restaurants’ insurance company.
The two-time James Beard Award winner is suing Cincinnati Insurance for business interruption coverage, arguing that North Carolina-ordered restrictions on dining prevented her eight restaurants from running at full capacity and should be covered.
This is the second notable lawsuit from a Triangle restaurant group against its insurance company, following the suit of Giorgios Bakatsias and Matt Kelly. They were the first restaurant owners in the nation to successfully sue for COVID-19 coverage. That suit was also against Cincinnati Insurance and is currently being appealed.
A class-action lawsuit
Christensen’s lawsuit is filed as a class action, meaning other Cincinnati Insurance policy holders in North Carolina could be automatically impacted by the judgment, said Gagan Gupta, lead attorney in the suit.
“Ashley is a leader in this space and a voice for the industry, and it’s encouraging and notable she’s weighing in,” Gupta said. “I think she has a similar story to most small business owners in North Carolina who bought insurance from Cincinnati expecting the coverage to pay in circumstances like these. So far Cincinnati has refused to do so.”
In October, Durham judge Orlando Hudson ruled in favor of Bakatsias and Kelly and their more than 20 Triangle restaurants. Gupta is also the lead attorney in that case.
In response to Christensen’s lawsuit, Cincinnati declined to comment on the specifics of the case, but said that it thinks a space must be physically changed or damaged for coverage to apply.
“We respect the rights of all parties to have their issues heard and resolved in a court of law,” said a Cincinnati Insurance spokesperson in an email. “For that reason, we do not comment on pending litigation. But generally speaking, the vast majority of court rulings in these cases, including those involving policies that do not contain virus exclusions, have resulted in dismissals due to the absence of direct physical loss or damage to property —which is a prerequisite for coverage under a property policy. “
Like most other states, North Carolina closed its dining rooms at the beginning of the pandemic and reopened months later at reduced capacity. The financial losses for restaurants have been staggering, as businesses once relying on alcohol sales and foot traffic were forced to turn to takeout and half-full dining rooms. In his ruling, Judge Hudson said having restricted access to restaurant space constituted a physical loss.
Triangle restaurant losses
The Triangle has lost dozens of restaurants in the last year, including Christensen’s Chuck’s Burgers.
“Business interruption insurance coverage is critical for my business,” Christensen said in an emailed statement. “But despite that the pandemic has wreaked havoc on the restaurant industry, Cincinnati Insurance has categorically refused to honor its business interruption policies sold across North Carolina. This is true even though Cincinnati’s policies, including mine, do not have virus exclusions. I brought this class action lawsuit to try and force Cincinnati to pay this coverage, which will be critical to ensuring restaurants across our state survive this devastating pandemic.”
None of Christensen’s restaurants, which include Poole’s Diner, Death & Taxes and Beasley’s Chicken + Honey, have reopened for in-person service, instead operating as take-out only or selling family-style meal kits.
According to the University of Pennsylvania Law School, which has been tracking insurance lawsuits since the beginning of the pandemic, there have been nearly 1,500 filed in the past year. More than a third of those suits came from restaurants.
This story was originally published March 16, 2021 at 8:00 AM.
