NASHVILLE, TN (WSMV) -- Last Friday, President Trump made it a point to address small business interruptions from COVID-19.
 
The President saying, “You have people, I speak mostly to the restaurateurs, they have a restaurant, they’ve been paying for 25, 30, 35 years, business interruption, they’ve never needed it. All of a sudden they need it."
 
Trump going on to say that in most cases the word pandemic is not listed in insurance policies. "You have people that have never asked for business interruption insurance and they’ve been paying a lot of money for a lot of years for the privilege of having it and then when they finally need it, the insurance company says we’re not going to give it. We can’t let that happen."
 
His remarks come after the owner of Headquarters Beercade in Nashville already joined forces with five hospitality groups in Chicago to file a lawsuit against their insurance company for being denied. Now, the Nashville Underground bar is suing their insurance for also denying the claim. 
 
The lawyer representing Nashville Underground, Kirk Clements says "Our policy has a rider which specifically excludes coverage for viruses and bacteria. It really does not address whether it’s a pandemic or not.  The easiest way to ensure coverage for losses due to viruses in the future is simply to eliminate the rider which excludes it. There are some insurance companies which do not require this rider. Notwithstanding this rider, the exclusion does not apply to the losses due to food contamination under our policy."
 
With many businesses being denied, News 4 asked Kell Holland, Executive Vice President of Zander Insurance for help explaining the situation. He says there are three areas they look at in the policy to determine whether there's coverage or not.
 
The first being the definition of business income. Holland says, "for that loss to trigger there has to be direct physical damage to the building, so think about the tornados that came through Nashville.”
 
The second is a virus or bacteria exclusion, “What they’re saying right now is a virus is not a direct damage to the building and is not a covered cause of a loss. So that’s usually the first area they’re saying it’s not going to be covered because of that.”
 
The third is civil authority for if the government comes in and shuts down an operation, "but even with that it’s got to be because of a covered cause of loss and then there’s usually a direct or physical damage within a mile of your building. So, we’re back to it’s not a covered cause of loss and even though the civil authority, the government is telling people not to go to work, it’s not because there is physical damage in their area.”

Holland says what is comes down to at the moment is insurance companies are looking from a policy perspective of how the policy was sold, the promises made, and how it's interpreted. Businesses can take legal action and hope the courts or government steps in to provide different guidance.

“As it goes through it could be that the legal system comes back and provides some level of coverage in their interpretation that the insurance companies are not interpreting the same way right now.”
 
Holland also recommends businesses go through the forgivable SBA program. It's something Nashville Underground says they've done.
 
Clements explains:
 
Yes, we applied and were approved for the PPP loan through the SBA. However, the PPP does not address business income loss since being forced to close; it only addresses payments for eight weeks for wages, rent, utilities and some employee benefits. We are pursuing coverage under our insurance policy because it provides more comprehensive coverage and for a longer period of time.  If we are unable to reopen or we are not allowed to operate our establishment to its capacity, we will continue to incur losses and not be able to pay our obligations, including paying our employees. Nashville Underground purchased this policy for such a situation as this and seeks to fulfill is financial obligations, not the least of which is keeping our employees fully employed. We hope the insurance company meets its financial obligations, as well.
 
 

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