Sarku Japan Takes a Stand Against Affiliated FM Insurance’s Bad Faith Conduct

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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.