Policyholders Get Landmark Win in NCAJ Member Case

In a landmark win for policyholders against an insurance company, several restauranteur clients represented by NCAJ members Stuart Paynter and Gagan Gupta, an NCAJ Board of Governors members, won their appeal before the Supreme Court of North Carolina on Dec. 13. The court ruled unanimously in North State Deli, LLC, et al. v. The Cincinnati Insurance Company, et al. that government-mandated closures during the COVID-19 pandemic constituted “direct physical loss” as described in the insurance policies they had in place.

The ruling means restaurants are entitled to recover lost business income and related expenses under their “all-risk” policies. The ruling was widely watched and written up in publications across the country as having “profound implications for the interpretation of commercial property insurance policies, especially in the context of unforeseen events like pandemics.”

Former NCAJ president Guy W. Crabtree authored an amicus brief for the plaintiffs on behalf of the North Carolina Restaurant & Lodging Association, Restaurant Law Center and Angus Barn, Inc.