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Several restaurants in Orange and San Diego counties and a Los Angeles County company that sells wine-related products are suing Farmers Insurance, alleging the company breached contracts by refusing to compensate them for losses incurred when business was curtailed during the coronavirus.

The plaintiffs in the Los Angeles Superior Court lawsuit are Starrs Products in Santa Clarita, The Black Trumpet Bistro Tapas & Wine Bar and Capone’s Italian Cucina in Huntington Beach, Fly N Fish Oyster Bar and Grill in Newport Beach, Centerpark Cafe in San Diego and NJND LLC, a San Diego restaurant and retail property.

The Starrs Products website states its products are “designed to enhance your enjoyment and the longevity of favorite wines.”

The suit filed Jan. 4 seeks unspecified damages and a court declaration that Farmers Insurance must pay the plaintiffs for their business interruption losses according to their policies.
“The denials … leave plaintiffs in dire financial straits — precisely the situation they sought to avoid when they obtained coverage for loss of business income,” the suit states. A Farmers Insurance representative did not immediately reply to a
request for comment.

The pandemic caused direct physical loss of or damage to the plaintiffs’ operations by impairing their ability to conduct business through displacement of their operations, the suit states.“Plaintiffs were deprived of the ability to function and operate,” according to the suit.

Without a ruling in their favor, there would be no prudent action business owner such as the plaintiffs could take to ensure coverage for a global pandemic, the suit alleges. “Such a result would be devastating to business owners and the larger economy,” the suit states.

The Black Trumpet and Capone’s paid insurance premiums to Farmers for about 1 1/2 years and had about 24 employees and 36 workers, respectively before the pandemic, the suit states. Centerpark Cafe employees about 23 employees and has paid premiums to Farmers Insurance for more than 32 years, while Fly N Fish has about 38 workers and has paid Farmers Insurance premiums for more than six years, according to the suit.

“Under each of these policies, plaintiffs agreed to make premium payments to defendants in exchange for Farmers’ promise to indemnify the plaintiffs for losses including, but not limited to, physical loss resulting in business income losses, ” the suit states.

But, despite collecting premiums for such risks, Farmers “swiftly denied each claim with little or no investigation and without due regard for the interests of insureds,” the suit states. “In fact, coverage was often denied by a Farmers claims representative over the telephone at the time the claims were reported.”