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Ky. restaurant sues insurance company for denying coronavirus claim

(Courtesy: Glenn Hall Photography)
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(Courtesy: Glenn Hall Photography)

PADUCAH, Ky. (WSIL) -- A Paducah restaurant owner is seeking civil damages after their insurance company refused to pay for business losses associated with the COVID-19 shutdown.

An attorney representing Cynthia's Ristorante said he filed a lawsuit Friday against Cincinnati Insurance Company (CIC) for denying its insurance claim for the loss of business income from a "shutdown order" issued by the Kentucky Cabinet for Health and Family Services.

"For years Cynthia has paid premiums on-time for an insurance policy to protect them, but their business was forced to close," Attorney Mark Bryant of Paducah-based Bryant Law Center said. "And they filed a claim but their insurance company denied the claim, and after reviewing the policy we filed a lawsuit. We think we'll win the suit."

The lawsuit filed in the McCracken County Circuit Court seeks current and future damages for the shutdown that's limiting business to curbside pick-up.

On March 16, 2020, Gov. Andy Beshear issued an order to close dine-in services for restaurants and bars throughout Kentucky. Kentucky is allowing restaurants to reopen at a limited capacity May 22. Bryant said the restaurant could open at that time but still be incurring damages.

"If you open at one-third capacity and your profits are down two-thirds, you are still going to be getting money for the two-thirds you didn't get," Bryant said.

Bryant points out CIC has placed virus exclusions in other policies, but there was no virus exclusion in Cynthia's policy.

"They're going to say the virus was not contemplated when that insurance was written. We believe the court is going to say no," Bryant said.

Bryant signals this could be the tip of the iceberg for litigation in a post COVID-19 world.

"This thing is going to get bigger and bigger," Bryant said. "Every person who is in business, who has taken a loss and been closed down because of the virus, if that company has business insurance they need to talk to a lawyer."

The lawsuit also lists defendants Steven J. Stack, MD, Commissioner of Public Health, Department of Public Health, Cabinet for Health and Family Services; Eric B. Friedlander,Secretary, Cabinet for Health and Family Services; and Kerry B. Harvey, Secretary, Public Protection Cabinet.

Of note: The story was updated to clarify damages sought.

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Jonathan Brines

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