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Tuesday, April 28, 2020
By Michael Nichols
Categories: Mathew J. Heos
Unlike any recent historical parallel, the covid-19 pandemic of 2020 has confronted the world with large-scale tragedy unseen since WWII. While the coronavirus infected the people of China, Europe and the US, and crippled their economies so severely, the Great Depression of the 20th Century provides the only relevant comparison. The economic effect is long-reaching. The tentacles of government-ordered shutdowns spread for weeks - before reaching into almost every hub of the private sector - the beast of fear smothered restaurants with mandated closures.
Probably rightly so: hospital systems have been overwhelmed, families separated from their sick loved ones, the sick sent to the hospital with the others who may also be infected – fear and uncertainty and exhaustion. Hospital staff pushed to the limits with minimal PPE and other critical equipment. Like their patients, the doctors and nurses also fell ill – sometimes taking the illness home to their families.
Some had no symptoms of illness and spread the virus unaware of the danger. The lack of knowledge about how virile the virus was in spreading is probably the biggest reason that eateries literally had to close their doors.
Government spending exceeded $4 trillion so far in the US alone to avoid an economic catastrophe in addition to the ongoing public health disaster. Not everyone has been in-line fast enough to catch the lifeline. Unemployment soared and passed 20 million jobless claims in the span of a few short weeks, while businesses deemed “essential” by their state’s governors, strove to keep things going and food on the table. Everyone else, for the most part, stayed home to stay safe. Business owners, desperate to hold their position and gains since the Great Recession – now over a decade old – wondered “could we lose everything, again?”
In search of any lifeline, some Michigan business owners have sought counsel regarding their business interruption insurance coverage. Generally, these provisions carry exclusions for virus or bacteria related business interruptions. However, most businesses have not been shut down because of an outbreak at their establishment. Rather, they were shut down due to an executive order by the governor. Depending upon the language in the insurance contract, a business owner may make a claim for business interruption losses relative to the government-ordered shutdown. In other words, even where the exception to the coverage did not apply, the insurance company fights their partner, who paid premiums in good faith out of their revenues, day after day, week after week, month after month.
Insurance companies face a looming tidal wave of business interruption claims in Michigan, nationwide, and around the world. They planned for this – it is time that the plan be put in place and business like restaurants get to collect. Contact Matthew Heos at the Nichols Law Firm for a consultation at 517 432 9000 or mheos@nicholslaw.net