Two Texas Businesses File Bad Faith Lawsuits Against Travelers

Two businesses in Texas have each filed lawsuits against Travelers Indemnity Company, accusing the P&C insurer of rejecting their damages and business interruption claims without investigating.

The plaintiffs for the lawsuit are Dallas-based restaurant Salum and Houston-based Frosch International Travel. Both their lawsuits were filed by Fears Nachawati Law Firm.

According to Salum’s lawsuit, Travelers defended its denial for the restaurant’s claim by stating the policy specifically excluded losses caused by “bacteria and viruses.” However, the “Deluxe Coverage” policy contains no such language, it states.

The lawsuit also said that Travelers claimed that Salum has not suffered because restaurants are allowed to sell food to-go, even though Salum has never offered takeout service.

In Frosch’s lawsuit, the company cited that its policy would “pay for [T]he actual loss of business income … sustain[ed] due to the necessary ‘suspension’ of your ‘operations.’” The policy also allegedly promised to pay for additional coverages, such as damages that occur when a business is closed by civil authorities — such as the mandatory closure ordered across the US in the wake of the pandemic.