Insurer Files Motion to Dismiss COVID Related Claims from McDonalds

The-Importance-of-Timely-EPLI-Claims-Reporting

Austin Mutual Insurance, a subsidiary of American Family Mutual Insurance, filed a motion to dismiss a lawsuit brought on by McDonalds and their franchises related to COVID.

In the litigation that this case, McDonald's Corp., et al. v. Austin Mutual Insurance Co. contends, several workers at the franchise listed in the suit were exposed to COVID and spread to their families. The lawsuit contends that “McDonald’s and the franchisees for public nuisance and negligence because of their decision to remain open during the COVD-19 pandemic “while simultaneously failing to comply with minimum basic health and safety standards at its restaurants,” according to the motion to dismiss. [1] In addition, the plaintiffs contend that if they don’t get a judgement they face physical and emotional injury.

Austin Mutual argues that McDonald’s has no grounds to sue them because they have no obligation to pay third party costs. “The parties did not intend Austin Mutual to pay the insured's’ costs of doing business to establish and enforce minimum basic health and safety standards at their restaurants while they remain open during the COVID-19 pandemic,” the motion states, in seeking the lawsuit’s dismissal.” They believe that the franchise failure to establish a minimum standard according to their state’s guidelines means they aren’t being covered and thus have no reason to cover the claim, hence their request to dismiss.

COVID related claims are beginning to present themselves as businesses are forced to shutter due to the lockdowns due to various reasons, including loss of income. They must prove whether these hardships are the result of the company’s noncompliance or if it’s just bad luck.

[1] https://www.businessinsurance.com/article/20201012/NEWS06/912337109/Insurer-seeks-dismissal-of-COVID-19-suit-filed-by-McDonald%e2%80%99s,-franchisees?utm_campaign=BI20201012DailyBriefing#

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