The operators of the popular Chicago-area Billy Goat Tavern restaurant chain have filed a proposed class-action lawsuit against Society Insurance, saying the insurer has unlawfully refused to cover their loss of business income during the ongoing coronavirus pandemic.
Billy Goat Tavern I Inc. et al. v. Society Insurance, No. 20-cv-2068, complaint filed, 2020 WL 1561735 (N.D. Ill. Mar. 31, 2020).
The plaintiffs, which operate seven restaurants in Chicago and another in the nearby suburb of Lombard, allege the insurer acted in breach of contract by denying coverage on the basis that they have not suffered a “direct physical loss” to their properties due to Illinois’ mandatory shutdown order.
The original Bill Goat Tavern in Chicago achieved national recognition by serving as the inspiration for the “Olympia Café” sketch on Saturday Night Live in 1978.
The plaintiffs filed a complaint March 31 in the U.S. District Court for the Northern District of Illinois seeking to represent all Illinois businesses that offer food or beverages for on-premises consumption, have lost business due to COVID-19 and have been denied coverage by Society.
In response to the COVID-19 outbreak, on March 16 Illinois Gov. J.B. Pritzker issued an order directing all restaurants, bars, grocery stores and food halls in the state to cease offering on-premise dining.
According to the lawsuit, the order permitted such businesses to offer carry-out and curbside pick-up services but mandated that they operate in an environment where patrons purchasing food or beverages “maintain adequate social distancing.”
The plaintiffs say they filed a claim for lost business income with Society on March 16 under an “all-risk” insurance policy that began Aug. 26, 2019.
The policy’s businessowners special property coverage form provides coverage for any “direct physical loss of or damage to covered property” that is caused by any “covered cause of loss.” The form does not define the term “direct physical loss,” according to the suit.
The form also states that the insurer will pay for the actual loss of business income stemming from the necessary suspension of the insureds’ operations during a “period of restoration,” the suit says.
Society denied the plaintiffs’ insurance claim four days later, it says.
The plaintiffs now allege that the coverage denial is unlawful because COVID-19 rendered their covered properties “unsafe and inaccessible for dine-in customers.”
The suit seeks a declaration that the plaintiffs sustained a “direct physical loss” at their properties.
It also seeks an order requiring Society to reimburse the plaintiffs for the business income they lost as a result of COVID-19 and the shutdown orders, plus unspecified compensatory and punitive damages.