The Ninth Circuit had certified a question to the California Supreme Court earlier this year, seeking guidance on whether the virus exclusion in The French Laundry’s and Bouchon Bistro’s policy was enforceable, given the potential conflict with limited virus coverage elsewhere in the policy. However, the John’s Grill decision effectively answered this question, making further litigation unnecessary.
California Eateries COVID Coverage : The Initial Lawsuit
The French Laundry and Bouchon Bistro filed their original lawsuit against Hartford Fire Insurance Co. in March 2020, shortly after the onset of the COVID-19 pandemic. The restaurants sought coverage for losses incurred due to government-mandated shutdown orders. However, a California federal court dismissed the suit in April 2021, ruling that the virus exclusion in the policy explicitly barred coverage for pandemic-related economic losses.
Conclusion
The decision by The French Laundry and Bouchon Bistro to drop their California Eateries COVID Coverage lawsuit highlights the growing trend of courts siding with insurers on the enforceability of virus exclusions in pandemic-related cases. As businesses continue to recover from the effects of COVID-19, this ruling sets a precedent for how virus-related claims are likely to be handled in future disputes.
