Businesses find insurance doesn’t cover virus-related losses
Lori Poe and her husband, Dave, own Tandem Connection, a bicycle rental, repair and sales business along the Montour Trail. They have two locations, in the Hendersonville section of Cecil Township and McDonald.
Because of a staffing shortage, the Poes are operating just one of them, the shop off Morganza Road in Hendersonville. Tandem Connection received a waiver from the state to remain open, as an essential business providing transportation needs for trail users during the COVID-19 pandemic. The couple has a fair share of repair and rental requests, and they sell snacks, bottled water and ice cream through a takeout window that the previous building owner installed, but which the Poes had not previously used.
Business, overall, has not been bad. “We’ve been lucky in that we’ve remained open,” Lori said. But the virus has, indeed, cut into the couple’s bottom line.
Like many owners, the Poes have contacted their insurance carrier about filing a business interruption claim, seeking compensation. And like many owners, they have been denied.
“We reached out to our representative, who looked into it and said (coronavirus), at this time, wasn’t covered,” Lori said.
Many business owners buy business-interruption insurance that covers them from weather-related damage, wildfires and other occurrences. But usually not a viral outbreak.
A number of insurance policies have clauses that specifically exclude losses from a pandemic, and according to an article in the online news outlet Cleveland Scene, “even carriers who sold insurance policies that do not explicitly contain virus-exclusion clauses are denying business-interruption claims.”
For owners, this is a quandary “that stems from the SARS outbreak in 2008,” said Melissa Bova, an official with the Pennsylvania Restaurant & Lodging Association. “Some policies do not cover this type of closure. God forbid, if you have a fire and your business is destroyed, you are covered. But with a pandemic, you are not.”
She said some insurers do add a separate clause that covers pandemic-related closures, at an extra cost. Bova said, however, that maybe “a third of businesses in Pennsylvania have this.”
Reflecting on the scope of the outbreak, she added, if a large number of small-business owners filed claims over COVID-related losses, “rates would be so astronomical, not one could afford insurance.”
State Sen. Pam Iovino is striving to help business owners recoup some of these losses. Iovino, D-Mt. Lebanon, whose 37th District includes part of Washington County, introduced Senate Bill 1127 this week that, according to a news release from her office, would “provide clarity to help ensure that insurers quickly pay meritorious business interruption claims, which could be critical to preventing a business from closing its doors.”
Iovino said in a statement: “I have heard from numerous small-business owners who have consistently paid their insurance premiums, yet are seeing their claims rejected during what the Pennsylvania Supreme Court has called a ‘natural disaster and a catastrophe of massive proportions.’ This legislation is not intended to rewrite current insurance policies; we simply want to clarify Pennsylvania law.”
Tandem Connection is not the only local enterprise that has been rejected, or expecting rejection, of course. Michael Passalacqua, owner of Angelo’s Restaurant in North Franklin Township, said he checked with his insurance company, and while he was “waiting for exact verbiage to come back,” was told he did not have coverage for a biological pandemic.
“And my insurance agent is a good friend.”