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You Can Fight Insurers Denying Business Interruption Claims, Attorney Says


The offices of Zarco, Einhorn, Salkowski & Brito in Miami, where they moved in March 2019, the firm's 25th anniversary.

Robert Zarco and his law firm partners have made their names over 26 years by suing franchisors in high-profile lawsuits on behalf of franchisees. Now he has another big target: insurance companies, which are routinely denying business interruption claims made by restaurant, hotel and other operators amid COVID-19 shutdowns mandated by the states.

"What's happening is these business owners are contacting their brokers, and they're saying conclusively, 'Oh, there's an exclusion. You have nothing,' without understanding the law," he said. He believes he can mount arguments and litigation that could force insurers to pay those claims, "at a time when they need it most." 

"Whoever you hire," he warned operators "that language used in the claim form can be used against you. The manner in which the claim form is filled out is very important," and he advises against doing so without an experienced attorney.

Zarco circulated a letter earlier this week offering the firm's services to fight such denials. "Zarco, Einhorn, Salkowski & Brito is currently working on these and other litigation matters arising from this pandemic for our clients," it says. "We want to hear your circumstances right away to offer you creative solutions to solve your legal business challenges and needs during this frightening period! Time is of the essence! It is always best to be prepared and seek our legal guidance prior to contacting your insurance company and making a claim!"

The firm plans to take suitable cases on a contingency basis, meaning they will get paid 30 percent of any reward, with a free initial consultation and a "small upfront fee" if moving forward. He wouldn't specify the fee. "So the franchisee has nothing to lose," he said, "other than invest a small amount up front in order for me to keep the lights on."

Of course, any litigation would be undoubtedly complex and protracted, with no guarantee of a successful outcome.

Reached yesterday, Zarco said he's taken about 150 calls over the last five days from owners who were told their business interruption insurance policies have exclusions for communicable diseases. Those exclusions were inserted into policies during the SARS virus scare, he said, but in many cases are in conflict with other clauses in the policies. "Whenever there is a conflict, it is construed against the drafter, which is the insurance company." 

"I have arguments that will overcome" the insurers' defense, he said, "and I can't give them to you now because I can't give you my 11 herbs and spices."

"Mostly the clients I'm getting are multi-unit operators. I'm getting hotels, auto dealerships, a lot of the bigger players that are losing hundreds of thousands of dollars," he said. 

"I'm at the forefront of this," he continued, in his typical boastful style. "I'm going to be the leader again, as I was on the franchise side. I'm going to take the bull by the horns while everybody's moping and groping.

"Frankly, you know better than anyone that I have made my career overcoming one-sided contracts written by franchisors," he said. "If I did it in the franchise world, why can't I do it in this world as well?"

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About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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