On March 6, 2020 Kentucky Governor Andy Beshear announced a State of Emergency with the rise of the COVID-19 pandemic. Businesses that are not determined “Life-Sustaining” close and residents were asked to stay “Healthy at Home.”
This shift changes everything for our local and national state of being. Many businesses had to close their doors and employees were laid off.
Insuring for the unknown
“That’s why you insure, to prepare for the unknown,” bar and restaurant owner Erik Baylis said to the Chicago Tribune. After furloughing his 450 employees during Illinois restrictions on dining due to the pandemic, Baylis’ insurance company said that he would not receive any aid.
Many assume that their business interruption insurance will step in during the pandemic. This is typically part of a property insurance policy and is meant to cover damage from a natural disaster like a tornado or fire. Some also cover losses caused by the government, like if authorities consider your property unsafe to work in.
Pandemic coverage denial
Some insurance companies have specific restrictions that deny coverage for viruses, but some don’t. The American Property Casualty Insurance Association (APCIA) says that business interruption policies are not created with the intent of covering contagions or viruses. There is also concern for the mass amount of claims coming in from businesses and a lack of insurance ability to cover them.
Baylis is one of thousands business owners who are suffering beneath the weight of the shutdowns. Now, many are bringing lawsuits against their insurance companies for denying coverage. They argue that their losses are caused by government actions, the business shutdowns, rather than by the pandemic itself, putting them within the realm of the business interruption policies.
While some look for government aid, others must wait for the outcome of their lawsuits against insurance companies to know if they will open their doors again.