Helping the 'interrupted' restaurant
In sleeping towns on Friday and Saturday nights, restaurants soldiering on despite this pandemic are the rare pockets of activity. Streets normally busy with people and traffic are empty except for clutches of cars near a pizza or sandwich joint here and there.
To be sure, these kitchens cooking for pick-up and delivery are unusual at any time on a new landscape mostly stilled by efforts to stop the spread of the coronavirus. State leaders trying to keep our economy limping along during the shutdown should give more attention to ways to help them.
Restaurant owners are looking for the government's help in forcing insurers to pay claims on business interruption policies, which more typically handle the disruptions caused by fires and floods.
While doing so may represent an unwarranted intrusion into private business during more normal times, things are different in a state of emergency. Take-out kitchens keep people employed and keep at least a little bit of business going in important economic sector. Both merit the attention of lawmakers.
The push for help is not just a Massachusetts or New Hampshire issuer. A national effort is underway, with a lobby called the Business Interruption Group making a case on behalf of restaurants everywhere. “Insurance premiums were paid to safeguard their businesses and the livelihoods of their employees in case of a natural disaster or civil authority shutdown,” the group says on its website. “But insurers are withholding coverage when businesses and workers need it most.”
A letter from a group called Massachusetts Restaurants United last month asked state officials to compel insurers to pay on these claims. It also asked for a dozen other interventions to help the industry, some of which have been addressed.
“Over the past decade, insurance companies have become more cautious about exposure and as a result, business interruption policies now include specific virus exclusions, some of which identify the COVID-19 specifically,” the restaurant owners wrote. “A bill is needed to force business interruption insurers to provide coverage for this crisis with an effective date of March 16, 2020.”
Sen. Jamie Eldridge, D-Acton, obliged with a bill that would make insurers consider a business interruption claim due to COVID-19 for any operation with 150 or fewer full-time employees. Nearly 40 lawmakers singed on including Sen. Diana DiZoglio, D-Methuen and Reps. Linda Dean Campbell, D-Methuen, and Tram Nguyen, D-Andover. The legislation would spread out those claims among all insurance companies that write business interruption policies in the state.
It’s not surprising that insurers are strongly resisting this movement. A rush of claims, they warn, could create further economic upheaval in their industry. And under normal circumstances, it might be hard to argue that the state should get involved in recasting or clarifying terms of insurance policies to benefit their holders after the fact.
But, fact is that restaurants and other small businesses pay premiums on this coverage just for this type of scenario — an event outside their control that shuts them down. And these are, indeed, unusual circumstances.
Massachusetts and New Hampshire have both intervened on behalf of restaurants by allowing them to sell take-out beer and wine, among other measures. Both states have delayed collection of businesses taxes. While those measures are helpful, darkened doors in our communities make clear that these steps alone aren’t enough to keep many restaurants open.
Lawmakers in both states should take a close look at the business interruption insurance carried by these businesses and hold insurers to account for the spirit, if not the letter, of these policies. And they should act fast — not only out of a sense of fairness but because these restaurants, which put people to work and help feed our communities, need support.