Dallas Restaurateur Sues Insurance Company For Denying COVID-19 Loss Claims

The owners of stalwart Dallas restaurant Salum are suing their insurer for denying claims related to losses caused by the COVID-19 pandemic.

The suit, filed in the Northern District of Texas federal court on April 24, alleges that Travelers Indemnity Company, which provides business interruption insurance coverage to Salum, improperly denied claims filed by the restaurant. According to the Dallas Business Journal, the insurer told Salum’s owners that it would deny their claims because there was no physical damage caused to the restaurant, and that Travelers Indemnity Company doesn’t cover “loss or damages caused by viruses.”

In its original complaint, Salum’s owners say that Travelers denied their claims for coverage while Dallas County’s “stay at home, stay safe” order was in place, and that its policy was intended to cover “the actual loss of business income sustained due to the necessary suspension of operations,” according to the complaint. The restaurant also claims that the language regarding how the company handles loss or damages caused by “bacteria and viruses” doesn’t appear in its policy, and shouldn’t be used as a reason to deny the claims.

In a statement provided to Eater, a spokesperson for Travelers Indemnity Company reiterated that Salum’s policy does not cover these types of losses:

We recognize that the spread of COVID-19 has affected many of us in ways we never could have expected, and we are taking many steps to support our customers, agents, brokers and communities during this difficult time. 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.

Travelers Indemnity Company has not responded to the lawsuit in court, but they’re not the only insurer that’s being sued for denying claims during the coronavirus crisis. Restaurateurs across the country are having their claims denied by insurers or fighting with their insurance companies to recover some of the money that they’ve lost since restaurants were forced to close their dining rooms.

In the suit, Salum seeks repayment from Travelers for “the full amount of property loss, business income loss, and extra expenses,” along with court costs and attorney fees. A court date has not yet been set.

Update, 1:14 p.m.: This story has been updated to include a statement from Travelers Indemnity Company.

• Dallas restaurant sues insurer for denying COVID business interruption coverage [DBJ]
• Why Are Insurance Companies Denying Restaurant Claims in Wake of Pandemic? [Eater]
• The Ugly Legal Battle Over Restaurant Insurance Has Begun [Eater]