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Did you grow up eating Chef-Boyardee pasta?

Apr 2, 2020

The Market:

The DJIA opened at 20,943.51. Unemployment numbers came out this morning, and a record 6.6 million Americans filed this past week.

How are we going to pay for the millions and millions (and millions!) of dollars of business income losses associated with this pandemic?

As days turn into weeks and the spread of COVID-19 continues, businesses which have been forced to curtail their hours or shutter all together are looking for financial relief, and they are turning to insurers and state legislators for solutions.

As a quick recap, over the past few weeks, a number of materially impacted business owners have filed suit against their property insurers seeking declarations that the insurers are on the hook for their respective business interruption losses. Insurers and insurance industry groups have argued that COVID-19 does not result in physical damage to property, and therefore there is no coverage for business interruption. Additionally, if the insurance policy at issue has a virus exclusion, then any potential coverage is eliminated.

Last Friday, a new case was filed in Illinois by a group of theater and restaurant owners (Big Onion Tavern Group, LLC et al. v. Society Insurance, Inc.). Similarly to the suits filed over the last two weeks, Big Onion’s action against its insurers requested that the court declare that the owners were entitled to coverage for the business losses they continue to sustain as a result of virus-mandated closures. There are, however, two unique things about this case. One, before the insureds even filed a claim, the insurer allegedly sent a memorandum to all its “’agency partners’…prospectively concluding that Society Insurance’s policies would likely not provide coverage for losses due to a ‘governmental imposed shutdown due to COVID-19…’” As a result, the plaintiffs not only requested that the court hold that the insurer had waived its right to deny coverage under the policy as it issued a blanket denial without adjusting any claims, but also included a bad faith count in their complaint. Second, the policy wording at issue did not have a virus related exclusion, and, according to plaintiffs, because other property policies do have that wording, it must follow that a virus can cause direct physical damage or an exclusion would not be needed in the first place to knock out coverage.

From a state legislative perspective, New York joined Massachusetts, Ohio and New Jersey by proposing legislation that would force insurers to provide relief to small businesses (businesses with less than 100 employees) in the state regardless of policy wording construction. Specifically, “(n)otwithstanding any provisions of law, rule or regulation to the contrary, every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption; shall be construed to include among the covered perils under that policy, coverage for business interruption during a period of a declared state of emergency due to the…pandemic”. The bill goes on to provide that insurers paying pursuant to the legislation would be entitled to reimbursement from the Superintendent of Insurance which, in turn, will fund such reimbursement via an assessment collected from all insurers that do business in New York. The insurance industry continues to forcefully oppose legislation of this type, foreshadowing potential instability of the marketplace as a whole if enacted.

One additional development of note comes from California. The state’s Insurance Commissioner, Ricardo Lara, ordered insurers doing business in California “…to submit data…regarding coverage of commercial business interruption related to COVID-19. The data will help state policymakers…understand the scope of insured and uninsured losses to businesses in order to help them recover and keep workers employed.” The Commissioner went on to say that the state is “currently working with the insurance industry and business groups to find creative solutions during this unprecedented crisis to make sure our businesses survive, and we need this data to define the size of the problem.”

Some encouraging news:

Despite the difficult times we are experiencing, there are lots of feel-good stories out there. Two examples that caught my eye follow.

Have you ever been to Burning Man? Me neither. But I understand the concept. At the end of each summer, some eighty-thousand creative people converge in Nevada’s Black Rock Desert for a week-long celebration “…dedicated to community, art, self-expression and self-reliance.” Because the party is in the middle of the desert, sand storms are a given, and participants annually pack face masks, goggles and gloves to protect themselves from the elements. Although the fate of the 2020 festival is still up in the air, Burning Man participants are banning together to donate their clean and unused Burning Man equipment to help healthcare workers on the front line of the COVID-19 crisis.

Did you grow up eating Chef-Boyardee pasta? Me too! And we aren’t alone. Conagra Brands, the owner of Chef-Boyardee, reported that the products are flying off supermarket shelves as the spread of COVID-19 is forcing consumers to stock up and hunker down at home. According to Conagra’s CEO Sean Connolly, “(p)eople are having flashbacks to their childhood…and hopefully having a good eating experience.” As I close out this blog post from my sometimes overly-uptight/certified organic/non-GMO/no corn syrup/1000% healthy town, I love reading stories like this. Of course the “glass is half empty” version of this story, which is true, is that we are buying canned processed pasta because it is cheap and convenient and lasts forever in our pantries. The “glass is half full version”, which I hope is also true, is that Americans may be giving themselves a little slack and finding comfort in food that reminds us of our childhood, and the time when our lives appeared a tiny bit simpler and easier.


  • CNBC
  • Big Onion Tavern Group, LLC et al. v. Society Insurance, case number 1:20-cv-02005, U.S. District Court for the Northern District of Illinois.
  • Claire Wilkinson, N.Y. introduces bill on pandemic-related business interruption claims, Business Insurance, March 30, 2020.
  • Commissioner Lara Orders Insurance Data on Business Interruption Coverage to Assist California Small Businesses, Press Release from the California Department of Insurance,, March 26. 2020.
  • Megan Graham, How the Burning Man community is helping to get masks and other supplies to hospitals, CNBC, April 1, 2020.
  • Tyler Clifford, People are having ‘flashbacks to their childhood’ as Chef Boyardee sales tick up, Conagra CEO says, CNBC, March 31, 2020.
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