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(USA Herald) - The well-known Japanese restaurant chain, Sarku Japan, is not taking Affiliated FM Insurance's inaction lying down. In a recent lawsuit filed in California federal court, the national chain is alleging that the insurer has failed to investigate its claim for losses related to the COVID-19 pandemic, which they say the company owes coverage for under the communicable disease provision in their policy. The restaurant alleges that the insurance company has been avoiding issuing a coverage determination despite their full cooperation and assistance.

According to an amended complaint filed last Friday, the restaurant provided Affiliated FM with an updated list of their store locations that had positive COVID-19 cases, as well as spreadsheets detailing their estimated business interruption losses and rent continuation expenses. Yet, despite all the evidence and information provided, the insurance company has failed to make a coverage determination, causing the restaurant to feel that they are being "strung along."

The restaurant claims that Affiliated FM failed to follow its own internal procedures, which indicate that there should be coverage under the communicable disease provision when an employee is infected at a covered location. Despite being advised by the restaurant that employees had tested positive for COVID-19, the insurance company allegedly asked for testing reports of the property, but without even investigating the claim, it refused to acknowledge coverage and refused to pay for the restaurant's losses.

Sarku Japan is represented by Cheryl L. Kozdrey, Theresa A. Guertin, and Anna M. Perry of Saxe Doernberger & Vita PC in the case against Affiliated FM Insurance, who is being represented by Joyce Wang of Carlson Calladine & Peterson LLP and Terrance Evans of Duane Morris LLP.

U.S. District Judge Trina L. Thompson recently granted Affiliate FM's motion to dismiss the suit, but noted that the insurance company hasn't yet denied coverage to Sarku under the communicable disease provision and has allowed the chain to amend its bad faith claims.

"The battle faced by Sarku Japan in their pursuit of rightful coverage from Affiliated FM Insurance Co. sheds light on the ongoing difficulties faced by policyholders in securing their insurance company's fulfillment of obligations," says Samuel Lopez, an investigative journalist with the USA Herald. "As a voice for policyholders and a critic of insurance company's unethical practices, I stand in solidarity with Sarku Japan in their quest for justice."