It is safe to say that many businesses will close their doors in response to the pandemic we are currently experiencing. For some this will be temporary, whereas others will not be able to stay afloat while we wait for our world to function as it once did. The questions many business owners have go something like this: Will my insurance company protect me? Can the coronavirus constitute as property damage? If not, how will economic loss be handled by insurance companies? Am I covered under my business interruption policy?
Insurance policies are the most sold and least read document in the world. Think about that for a second. If you are like the majority of the population, that might have hit you pretty hard, especially when you consider the Coronavirus and how it is impacting every single one of us. If you are a business owner, that sentence might have even scared you in a time like today. Below we will lay out the types of things you should be wary of, and what questions your insurer needs to be able to answer for you. First, we’ll start with a little refresher.
For insurance to come into effect, there has to be an “event” which is a “covered loss” – these items are defined policy by policy. There are endorsements and exclusions – usually the endorsements and exclusions either limit the recovery or completely exclude the recovery for exposure or disease type of cases. Once you have that laid out, your policy will have different areas of coverage, the most common being building property loss, ancillary property (offsite or storage area), contents of building, and business interruption.
A coverage area we’re going to address in relation to Covid-19 is business interruption, is held by many small business owners – restaurants, bars, medical and dental offices. Recently, there have been stories circulating of restaurants asking for donations in the form of gift cards or Venmo payments so they can disburse them to their employees. In fact, a restaurant group in our county has done just that. So where does business interruption come into play? Unfortunately, some might not see it at all. For others, it might have a small cap at $25,000, which might not be enough to cover payroll over two weeks time, let alone two or three months. There could even be a sneaky provision that contains a waiting period before that coverage is triggered or available. It is clear here that policies vary widely, and it is your job as the policy holder to understand yours.
Businesses have found another hidden clause in their policies. If the business is shut down via a government or state order, does it qualify under a disaster or damage policy? It might be the case that a disaster is happening outside of the business, but the issue will be whether or not there was a disaster inside, or simply a state order requiring a shutdown. If rather, you have a Covid-19 positive employee, then the closure could be covered in order to properly disinfect the business. Then the problem becomes timeliness and how long it really takes to clean a business, which brings us to our next question.
How long this is going to last? Right now, we have no idea what the period of coverage will need to extend to. If your claim is accepted and you receive $50,000, will that be enough? If your area is seemingly untouched, it might. What if instead, your policy only covers the time it takes to to repair the damaged property. Insurance companies are likely to argue this is a quick process, simply wipe down and disinfect the establishment in a day. However, we know the virus persists in the area and is easily spread in the air, which should therefore extend the period of coverage.
It all comes down to the way policies are written. Insurance companies sell on the big print, “Business Interruption” and pay-out on the small print “Endorsement for Disasters.” As you can see, policies and their exemptions can vary widely. The verbiage alone can and will make the difference in an accepted or denied insurance claim. In the future, will we see an entirely new insurance policy specifically for viruses like this one? These are just a few things to think about. If you have questions about yours, give us a call today at 850-215-7777. One of our skilled attorneys will be happy to answer any questions you may have.
Empty shelves, mass hysteria, long lines, fights over products; as a Floridian, this might sound like the beginning of hurricane prep. Here we are going to lay out what is different, what is the same, and how to prepare so you are not taken advantage of. If you were one of the many affected by Hurricane Michael, all of this will sound very familiar to you. So, what is the point? Here, the goal is to refresh your memory on how things are going to change in the coming days, weeks, and months.
With Coronavirus, we are not going to be flooded with evictions in the same way we see after a natural disaster, such as a hurricane that damages a home, or when a landlord wishes to participate in price gouging. In this scenario, they attempt to push the tenant out in order to double or triple rent. Instead, the question that will inevitably arise is this: How am I going to pay rent if I am not working?
Eviction restrictions are jumping from city to city in response to closed businesses and schools alike. Some major cities are setting the restrictions at 30 days, and others (such as Boston) have taken it upon themselves to extend to 90 days with check-ups in between. In a strange turn of events, renters are protected amidst this pandemic. If the government decides to extend this restriction to commercial evictions, it could additionally prove to be beneficial to small businesses. Only time will tell if the court system is later inundated with eviction cases once the aid restriction is lifted.
After a natural disaster, many mortgage companies reach out to their clientele and offer deferment or abatement of payments. While this might sound like a good idea, many experienced Floridians know this means your $1,500 monthly payment is still assessed on the 1st, and after six months of “freebies,” you are stuck with a $9,000 bill. Ouch. While this might be ideal for some, it is a trap for others. Now is the time to look at your finances and see which course of action is going to be best for your family in the long run.
It looks like this time around we are going to receive a different kind of government aid. Instead of small business loans and FEMA trucks, we might all see a check with our name on it arriving on our doorstep. While the implications of this decision may prove to be detrimental, it could help to assist an even great recession from occurring during this strange, isolated time. How far can $1,000 go? Will the common US household be able to survive on this alone in the coming weeks? This is yet one more thing to look to when laying out your financial decisions.
After a hurricane, power is lost and so is a lot of hope. While most of us are participating in social distancing, there are still a multitude of ways to keep contact with others, thanks to the modern-day era. If you hop on any site, you will see a list of things and places that are cancelled, postponed, or closed. If your email inbox looks anything like mine, you have heard about how every company you have ever interacted with is handling COVID-19. What the goal is now, is to realize what all is not lost. Phone lines are not down, grocery stores are not depleted, interaction is not lost.
While you are concerned with stocking up on toilet paper, Clorox wipes, Mucinex, and bleach, make sure you stock up on compassion, too. There are people from all different ways of life who will need to come together for support after this blows over. Nothing brings people together like a natural disaster, and I believe the Coronavirus will do the same.
Two weeks before the anniversary of Hurricane Michael, a ray of light was seen. FJA Research & Education Foundation donated more than $20,000 at the Bay Count Court House. The proceeds were presented to Habitat for Humanity ReStore of Bay County Florida, and Rebild Bay County Inc.
FJA members and attorneys Larry Perry, Kelly Roberson, and Waylon Thompson were on hand in the courthouse to present the donation on behalf of FJA-Research and Education Foundation to 14th Circuit Judge Chris Patterson, Lance Rettig Executive Director of Habitat for Humanity, and Donna Pilson USAF(R) representative for Rebuild Bay County Inc.
“Hopefully in the future, we have more contributions, as other charitable organizations reach out to our firm,” Perry said.
“This money from the Florida Justice Associaton will help us in what we’re doing. We’re doing both repairs for people impacted by the hurricane and we’re building new homes as well. To give you an idea, at least two full repairs can be done with this amount,” Rettig said.
Please visit these organizations on Facebook to learn more about what they do to help the citizens of Florida with disaster relief.
The money came from multiple attorneys who are part of the Florida Justice Association.
Pictured from left to right:
Larry Perry, Kelly Roberson, Judge Chris Patterson, Donna Pilson, Lance Rettig, Waylon Thompson.
If you would like to join Perry & Young in contributing to the victims of Hurrican Michael or the FJA Research and Education Foundation please give us a call at 850-215-7777 or contact us online.