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In-N-Out Burger Sues Its Insurance Company For Denying Its Claims

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The In-N-Out Burger in Hollywood, California, in June 2015.
(Mike Mozart/Flickr Creative Commons)
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Irvine-based In-N-Out Burger is suing its insurance company, making it one of the most famous combatants in a high-stakes battle between restaurants and their insurers over coronavirus-related claims.

In late May, In-N-Out filed suit against Zurich American Insurance Company, reports Nation's Restaurant News, claiming "the insurer breached its contract by denying the chain's claim for business interruption losses tied to the coronavirus pandemic."

According to NRN, the lawsuit doesn't say how much money the fast food chain has lost during the crisis. It does, however, reveal that its "all risk" policy with Zurich, which is capped at $250 million, does not have an "exclusion for viruses or infectious diseases."

In-N-Out's lawsuit is the latest salvo in a larger battle.

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On one side, you have restaurants — from the high-end food empire of Thomas Keller to smaller operations like Musso & Frank, Pez Cantina and Scratch Bar — who say their insurance policies are supposed to reimburse them for losses incurred due to "business interruptions" — like the ones that occurred when Los Angeles county and city officials ordered restaurants to shut their dining rooms due to the coronavirus pandemic.

On the other side, you have insurers claiming that various clauses in these policies — most often "virus exclusion" clauses — mean they don't have to pay out. With the insurance industry staring down the barrell of potentially hundreds of millions of dollars in payouts, it's no surprise they'd be looking for reasons not to cut those checks.

This battle isn't confined to the restaurant industry. Other types of businesses are also suing their insurers for denying their coronavirus-related claims.

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