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Broker Seeks Dismissal of COVID-19 BI Lawsuit

Asks court to throw out negligence claim.
June 10, 2020

The insurance broker for a Kansas City, Missouri, barbecue chain asked a court to throw out a negligence claim brought by the company alleging the broker was in part responsible for an insurer’s denial of coverage for coronavirus-related business interruption losses.

Lovell Sagebrush Insurance Group Inc. argues that it could not have foreseen a pandemic when it placed coverage last year for Ja-Del Inc., which operates Jack Stack Barbecue Restaurants, and that it is not required to predict “every possible gap in insurance coverage.” Ja-Del sued its insurer, retail broker and wholesale broker it had lost income due to government-ordered shutdowns during the pandemic and coverage was triggered under its commercial insurance policy.

Unlike most of the other suits, however, the restaurant also targeted its brokers, arguing that they communicated inaccurate information about the coverage and did not procure wide-enough coverage.

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