The owners of the Four Seasons Hotel Los Angeles in Beverly Hills are suing members of the Chubb insurance group for alleged breach of contract by failing to compensate plaintiffs for millions of dollars in business losses incurred during the coronavirus pandemic.
Burton Way Hotels LLC filed the lawsuit in the Los Angeles Superior Court on Friday, naming several Chubb insurance companies as defendants. The lawsuit demands unspecified damages and a judicial determination that the damage is covered by the hotel policy with the insurers.
A representative from the Chubb group did not immediately respond to a request for comment.
The Four Seasons on Doheny Drive is a five-star hotel and the crown jewel in the Four Seasons portfolio, which opened in 1987 and enjoys an international reputation in connection with the highest level of service and luxury, says the suite. The hotel employs hundreds of people and has multiple restaurants, numerous amenities, and more than 250 rooms, the lawsuit states.
In March 2020, the hotel had to cease or reduce the operation of restaurants, bars, banquet halls, conference rooms, spas and other hotel facilities on site, as well as work for temporary periods with reduced guest capacity, according to the lawsuit. State orders also required the hotel to restrict business operations, the lawsuit said.
“Simply put, the Four Seasons Beverly Hills could not operate at full capacity,” the lawsuit said. “As a result, Burton Way has suffered significant financial losses, including lost profits and lost business opportunities.”
To date, Burton Way has suffered more than $ 25 million in losses, the lawsuit said.
The hotel’s management company bought property insurance from the Chubb insurers, which provided comprehensive all-risk protection, including coverage for economic losses resulting from direct physical loss or property damage, the lawsuit said.
“Insurers have known for more than a decade that they and their policyholders are at significant risk of loss from viruses and pandemics, and have often included an exclusion in their policies to limit or exclude coverage for such damage,” it says the lawsuit. “Still, insurers chose not to include any of these exclusions in the policies they sold to Four Seasons.”
The hotel sought cover for the damage it suffered, but the insurance companies “have so far wrongly withheld the insurance benefits to which (the hotel) is entitled,” according to the lawsuit.
“There is no basis for insurers to withhold insurance benefits,” the lawsuit said. “When selling all-risk insurance, the insurers have promised to cover financial losses comprehensively, unless an exclusion would clearly and conspicuously apply as a cover block.”
The hotel’s losses attributable to the presence of COVID-19 “are directly under the coverage provided by policies purchased from insurers,” the lawsuit said.
