In bid for relief, restaurants wage lobbying war against insurers

Eateries pushing for business-interruption claims even if policies exclude pandemics

TRD NATIONAL /
Apr.April 20, 2020 09:30 AM
Restaurants and insurers fighting a war over whether coronavirus distress should be covered by business interruption insurance. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

Restaurants and insurers are at war over whether coronavirus distress is covered by business-interruption insurance. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

Restaurants and the insurance industry are shaping up as two of the biggest rivals in the coronavirus pandemic.

Eateries are pushing Congress and President Donald Trump to cover business-interruption claims that stem from the coronavirus even in cases where their policies exclude losses from pandemics, according to the Wall Street Journal. Insurers do offer coverage in some cases, but not many restaurants carry it. Such policies are generally much more expensive than standard business-interruption claims.

Restaurants are among the businesses hit hardest by the pandemic, and their inability to make rent impacts landlords who have loans to pay. And for many restaurant owners, it’s unclear if small business loans from the government’s $2 trillion stimulus package will cover them until it’s time to re-open.

The Business Interruption Group — the main organization backing restaurants — has launched a campaign pushing insurers to pay claims regardless of whether restaurants have pandemic coverage and pushing the government to reimburse insurers.

But insurers have gained the support of a group of Republican senators, who have urged Trump not to rewrite the country’s insurance policies, as they maintain that doing so would undermine the system.

Insurers argue that having to pay claims for damages excluded from policies would be a disaster and wants the federal government to create a fund that would pay for claims stemming from the pandemic.

In a letter to Rep. Mike Thompson, a group of insurance trade associations wrote, “Mandating coverage for this size and type of exposure while nullifying existing exclusions would amount to an unconstitutional abrogation of insurance contracts and end the very existence of the business-interruption insurance market as we know it.” [WSJ— Eddie Small


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