In-N-Out Burger’s breach-of-contract suit against Zurich American Insurance Company over denial of its claim is only the latest wrinkle in what has become a contentious debate around business interruption coverage in the time of stay-at-home orders. For restaurants, which don’t have the option of remote working, it’s an especially sore subject.

In its complaint, filed earlier this week in federal court in California, In-N-Out says it has an “all-risk” coverage plan with Zurich that covers common risks such as fire. The coverage, with a payout capped at $250 million, also extends to “novel risks that may arise which were not previously considered by the company, Zurich or by the public-at-large,” according to Restaurant Business.

The complaint says the policy “contains no exclusion for viruses or infectious diseases.” In-N-Out says it suffered “significant losses” as dining rooms were shut down in most states.

“As a result of the COVID-19 pandemic, the property damage caused by the novel coronavirus, and in compliance with government guidance and orders, In-N-Out was forced to close all of its restaurant dining rooms,” the complaint says. “Based on the phased reopening being permitted by numerous government agencies, it appears highly likely that the reopening of dining rooms will be allowed only in a phased approach that may vary by specific location.”

The company says it “has suffered and continues to suffer significant losses from the closures of its dining rooms,” although its drive-thru windows remained open.

Restaurant Business reported that business interruption insurance has become a major point of contention as the coronavirus led to industrywide closures and service reductions. High-profile restaurateurs such as Thomas Keller have sued over service denials. Boston-based seafood chain Legal Sea Foods has also sued over its policy.

Restaurant groups have pushed for assistance, and state legislatures have introduced their own bills to extend business interruption coverage to COVID-19, reported Restaurant Business.

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