The owner of a property leased to Red Lobster has filed a lawsuit against a Zurich Insurance unit, claiming the insurer negligently failed to name the owner on settlement checks issued to Red Lobster following a fire. The oversight allegedly allowed the restaurant chain to avoid using the $1.2 million payout for necessary property repairs.
Red Lobster Sues Zurich : Background of the Dispute
RL New Brunswick Owner LLC, the property owner, filed the complaint in New Jersey state court in August, and it was removed to federal court on Thursday. The owner asserts that Zurich American Insurance Co., which provided the insurance policy for the Red Lobster location in East Brunswick, New Jersey, breached its contract and acted negligently by not including RL New Brunswick as a loss payee on the settlement checks.
Fire and Insurance Settlement
The dispute stems from an August 2022 fire that caused extensive damage to the Red Lobster restaurant. Under the terms of its lease agreement, Red Lobster was required to maintain an insurance policy covering the property and to name the property owner as a loss payee. Zurich’s policy, which ran from November 2021 to November 2022, provided up to $6.7 million in coverage.
