An earlier version of this story erroneously said law firm Lewis Brisbois was representing the class-action plaintiffs. Lewis Brisbois is representing P.F. Chang’s.
Insurer Travelers has filed federal court papers seeking a declaratory judgment against restaurant chain P.F. Chang’s, which is seeking coverage for a data breach under a commercial general liability policy.
According to documents in US District Court in Connecticut, Travelers seeks to be cleared of any obligation to defend or indemnify P.F. Chang’s China Bistro as it faces litigation related to a June breach of customer payment card data.
P.F. Chang’s said it was notified of a breach on June 10 by the US Secret Service. An investigation is ongoing, the restaurant said, but a compromise of its card-processing systems was contained. Reportedly about 7 million customer payment card were involved, according to court documents.
Some payment-card data may have been stolen from at 33 P.F. Chang’s restaurants at varying timeframes dating back to October 2013. However, P.F. Chang’s insists it had not found that any specific cardholder’s payment card data was stolen.
P.F. Chang’s, represented by law firm Lewis Brisbois, sent Travelers an initial notice of claim. The Scottsdale, Ariz.-based business faces several class-action lawsuits as a result of the breach.
The plaintiffs allege a failure on the part of P.F. Chang’s to properly safeguard its customers’ financial information. Lawsuits furthermore allege breach of fiduciary duty, breach of implied contract, negligent misrepresentation, and violation of state and federal consumer-protection laws.
According to Travelers, the lawsuits P.F. Chang’s faces are its problem, not the insurer’s problem.
The lawsuits “fail to trigger coverage under the policies” because they do not allege bodily injury or property damage and the do not allege advertising injury or personal injury as they are defined within the policy, Travelers said. The policies also contain exclusions for violations of consumer financial protection laws.
Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
