Rare victory for SF restaurant that sued insurers after losing millions in pandemic

John’s Grill, home of long martini lunches and lamb chop dinners in San Francisco, has settled an insurance lawsuit in a very rare victory in the nationwide quest of restaurants seeking to have their insurers cover business losses incurred during COVID-19 lockdowns.

The terms of the settlement were not disclosed, but Joe Cotchett, the attorney who represented John’s Grill, said the payout to the restaurant is “substantial.”

Cotchett filed a federal lawsuit against the restaurant’s insurer — the Hartford and its affiliate Sentinel Insurance Co. — on behalf of John Konstin, the owner of John’s Grill, which has sat just off Market Street for 114 years.

The settlement is touted as one of the first victories against a major insurer over business interruptions caused by the COVID-19 pandemic. These claims have been routinely denied in courts because the losses incurred by businesses were not physical. It comes even as both the California Supreme Court and the state’s First District Court of Appeal have sided with insurers in denying pandemic-related claims for loss of business.

Earlier this week, the Ohio Supreme Court ruled that insurance companies are not liable for claims of lost business income because of a government-ordered shutdown. The decision stated that the temporary loss of use of a premises does not constitute a physical loss.

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