An Acworth restaurant is not entitled to collect insurance to recover its losses because of the COVID-19 pandemic, the federal appeals court in Atlanta ruled Friday.
Henry’s Louisiana Grill had filed suit against Allied Insurance Co. of America after its affiliate, Nationwide, denied coverage. The suit noted that Henry’s acted like a “responsible business owner” by closing its dining rooms for normal business after Gov. Brian Kemp declared a public health state of emergency in March 2020.
Henry’s, owned and operated by Henry and Claudia Chandler, has been in business for almost 22 years. Henry Chandler, the restaurant’s chef, was previously honored by the ABC News Nightline television show with the “People’s Platelist Award.” He could not be reached for comment.
In its ruling, the 11th U.S. Circuit Court of Appeals noted that every other state and federal court to consider a claim similar to Henry’s had ruled COVID-related expenses and losses were not covered by insurance.
The common problem is that the insurance policies protect against only “direct physical loss of or damage to” the businesses’ properties, Judge Britt Grant wrote for a unanimous three-judge panel.
Henry’s had argued that it suffered a physical loss of property when it lost the use of its dining rooms during the COVID-19 closure. And it argued it was deprived of that physical space during the pandemic.
“A restaurant’s dining room, no doubt, is a physical space,” Grant wrote. “But even if the governor’s order restricted the dining room’s use, that had no physical effect on the property. It did not destroy, ruin or even damage any part of the restaurant.”
Because Henry’s suffered no actual physical loss, it cannot collect insurance to recover its losses, Grant wrote.
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