North State Deli, et al. v. Cincinnati Insurance Co, et al.

Issue
Whether insurance companies have to pay for losses incurred because of COVID-19 under business interruption insurance policies that restaurants argue do not require physical destruction but only an inability to use the property for the purpose intended, triggering coverage.

January 16, 2024
The Restaurant Law Center and the North Carolina Restaurant & Lodging Association filed an amici curiae brief in support of a group of restaurants and bars urging the North Carolina Supreme Court to reverse a decision by the North Carolina Court of Appeals. The two groups argue that defendant’s “all-risk” policy does not exclude coverage due to the government orders or virus-related losses.

December 13, 2024

The Supreme Court of North Carolina, on discretionary review of a unanimous decision by the North Carolina Court of Appeals against our members, reversed in accordance with the request from the Restaurant Law Center and the Plaintiffs. The NC Supreme Court held that a “reasonable policyholder in the restaurants’ shoes could expect ‘direct physical loss’ to property, as used in these policies, to include the results of COVID-19-era government orders which affected the restaurants’ use of and access to their physical property.” The court made clear that insurance companies should not be “licensed to pitch consumers on an expansive, ‘all-risk’ policy, while hiding behind a narrower definition imposed by judicial fiat when it comes time to pay out.”