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Chef Thomas Keller is suing his insurance company to save American restaurants

The French Laundry founder is fighting to close an insurance loophole that could mean life or death for restaurants across the country that have been forced to close due to COVID-19.

Chef Thomas Keller is suing his insurance company to save American restaurants
[Source images: siiixth/iStock; Denys/iStock; Flickr user City Foodsters]

For Fast Company’s Restaurant Diaries, we’re asking chefs, restaurateurs, and food-world employees to take readers inside their businesses and lives at this critical moment for the industry. 

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Chef Thomas Keller’s restaurants, which include The French Laundry in Yountville, California, and New York’s Per Se, were thriving prior to the coronavirus outbreak. As the virus spread in March, the world-renowned chef laid off most of his 1,200 employees and shut down his restaurant empire. He started a relief fund for his employees. Now, he’s suing his insurance company, Hartford Fire Insurance Co, arguing that it should cover coronavirus-related business losses. Keller tells us why he hopes his suit will set a precedent and about how he and several other top chefs are turning up the pressure on insurers.

In the restaurant business there is a sense of camaraderie, of brotherhood, of care: We have an emotional connection with our customers. We are always coming to help those in need. We fed people after 9/11, Hurricane Katrina, and Sandy.

The problem is that, today, it’s the restaurants that need help. My concern is primarily for the smaller places: the mom-and-pop restaurants, the Chinese takeout places, the neighborhood taquerias, the bars. Our margins are so small. Not only do they operate day-to-day or week-to-week, but they don’t have the lawyers or people to help them navigate the loans and benefits that can help them. It breaks my heart to know that there are half a million restaurants at risk.

Chef Thomas Keller [Photo: Deborah Jones]
Everyone is affected by restaurant closures: the local community, farmers, foragers, as well as the plumbers and electricians who work on our restaurants. Small farms have been badly affected. Our butter lady, Diane St. Clair, of Animal Farm in Vermont, has about 10 cows, and her livelihood is making butter for two or three places, including ours. Now she has to milk the cows every day and dispose of it because she can’t sell the butter. And there’s Keith Martin [the founder of Elysian Fields Sheep Farm], whom I’ve known for 23 years and who has changed the way we raise animals. He told me he has maybe two weeks before he goes out of business. So we put together a “Chef’s pack” with butter from Diane, lamb from Keith, and vegetables from other suppliers for sale online. Hopefully they’ll get some business. Still, I don’t want to act like restaurants are the most important thing. We need to help doctors and nurses and people on the frontlines.

I am suing my insurance company, the Hartford Fire Insurance Company, because right now, when we need them, they won’t help us. Since opening The French Laundry, we’ve paid about $15 million over 25 years for business interruption insurance. But now that we need the payouts, they are denying us and many others relief because in many policies events like viruses are excluded. A lot of insurers made sure of that after SARS broke out in 2003. It’s like being denied medical insurance because of a preexisting condition. It’s irresponsible and amoral.

I have a special clause in my policy to cover events like this—and I am still not getting money from them. If they’re not using the cash we pay them to help us, what are they using it for? If they don’t help us now, who is going to trust insurance companies going forward? I hope my case will set a legal precedent. If restaurants survive because [insurance companies] help them, we’re going to come back and keep paying for insurance. It’s a better situation than half a million restaurants closing.

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I  started an initiative called Business Interruption Group with other chefs, including Wolfgang Puck and Jean-Georges Vongerichten. The group puts legal and political pressure on insurance companies to cover restaurants. We recently spoke to President Trump. Insurance companies are also a good conduit to distribute money: they know how to do it; they can make the calculations easily. I believe it’s the best and most effective way to distribute relief. The government can try to help, but it will take time, and this is an immediate situation. The government can backstop insurance companies, and it can hold them accountable.

People have an emotional connection to the restaurant and hospitality industries. These industries always come to the aid of whoever needs it, and it’s important to come together to nurture and support each other through this crisis. I hope that insurance companies can help us.

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