Community Oven owner Shane Pine and daughter Alyssa Pine, who are concerned for their industry’s future amid the coronavirus pandemic. [Max Sullivan/Seacoastonline] ▲

HAMPTON -- Community Oven owner Shane Pine said the novel coronavirus pandemic cost him $75,000 in sales last week, and he was shocked his insurance company did not help cover his loss.

His business interruption policy includes coverage for up to $10,000 in losses for "virus" in any one policy year, he said.

However, he was told by Acadia Insurance Company he would not be reimbursed because neither his staff nor customers were infected with a virus. He said a statewide executive order banning dine-in service to prevent the spread of COVID-19, the disease caused by the virus, did not qualify for the claim.

"The biggest disaster in the last 100 years is not part of my disaster policy?" said Pine, who also owns the Shane's Texas Pit barbecue eatery. He hoped to use the reimbursement to pay his employees during a layoff of at least three weeks.

Business owners in financial freefall amid the coronavirus pandemic say they are frustrated to find their insurance policies don't cover the virus's toll on the economy.

Scott Logan, who owns Logan's Run on Route 1 in Hampton, said he filed his business interruption claim over the pandemic but was rejected. He said he was told his policy has an exemption for claims over losses from microorganisms.

Like Pine and other restaurant owners, Logan is trying to stay open by serving only takeout and delivery since the governor handed down the order March 16 to halt dine-in service.

"We were forced to shut down by the state, not a microorganism," said Logan. "I don't get it."

Acadia's parent company, WR Berkley, declined to comment on individual cases or give an interview on such claims being denied to business owners affected by the coronavirus.

The N.H. Insurance Department has posted an FAQ page on business interruption claims over the coronavirus since the beginning of the pandemic.

"This has come up in the last few days," said Taylor Caswell, commissioner of the state Department of Business and Economic Affairs. He said the frequency with which such claims are being denied was raised on a conference call Friday between the governor, himself and representatives from about 20 different chambers of commerce.

State insurance officials say whether one's claim is accepted typically depends on if the interruption was brought on by a direct physical loss, like if the kitchen had to be closed for decontamination.

"This fact pattern is different from a restaurant that closed because customers ceased coming to the restaurant out of a general fear of infection," the website states.

The site explains policies often provide for some coverage for "civil authority" relevant to a government-declared state of emergency, but that it still typically requires a direct physical loss. Eireann Sibley, communications director for the state Insurance Department, said a "direct, physical loss" has been held by courts to exclude economic losses unaccompanied by a distinct and demonstrable loss of the physical use of the business property.

Sibley said viral or bacterial outbreaks are normally excluded from business interruption insurance policies because insurers do not have enough data to understand the potential impact of pandemic-related claims and how to rate the policy accordingly. He said insurance carriers began to exclude viral or bacterial outbreaks from standard coverage after the SARS outbreak in the early 2000s.

"It's rare in a natural disaster, that that is covered," said Galley Hatch owner John Tinios, whose restaurant is running solely on takeout until at least April. He said from his experience, insurance companies usually offer more coverage against disasters at a higher cost. He was still getting clarification from his insurance company Friday about whether his claim would be covered. He said he called to find out but was told they would get back to him.

"They've got such a backlog. It's the same thing with banks," said Tinios. "The uncertainty is freaking people out."

Businesses in New Hampshire will have access to up to $2 million in assistance from the U.S. Small Business Administration, which approved the Granite State's eligibility for the loans Thursday. The loans can be used to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of the disaster's impact.

Pine, who opened the Community Oven in 2012, said he has never had to file a claim like this. He said a successful claim would have meant he was reimbursed for loss of sales and lost wages. On the phone with the insurance company, he said he "never got that far into it" before being disconnected.

"Just, 'Deny, deny, deny,'" said Pine.

Still, Pine is concerned about how long businesses like his can survive the pandemic, saying many restaurants cannot last on takeout and delivery alone. He hopes Gov. Chris Sununu will enact an executive order intervening in claims related to coronavirus, similar to when he temporarily forbid landlords from evicting people over late rent or utilities turning off service. Sibley said Sununu's office "is monitoring the impact of the emergency orders on New Hampshire businesses and will find innovative ways to help as many people as possible."

Mike Somers, president and CEO of the New Hampshire Lodging and Restaurant Association, said insurance companies will need aid through means like government reimbursement if they are going to cover all the claims being filed this week related to coronavirus.

"If every single restaurant or hotel in the state of New Hampshire successfully applies for relief from the insurance companies, it's likely going to bankrupt the insurance companies," said Somers. "It's going to take some creative thinking outside the box to get through this."

State Sen. Tom Sherman, D-Rye, said he plans to advocate for business owners like Pine who are pushing to get their losses covered by their insurance. He said even with restrictions in place, restaurants will be valued in the pandemic for their part in keeping food available.

"I'm going to pursue this into the ground," said Sherman. "We all are in this together, and if you buy insurance and your payments are up to date, you should be covered for this."

Loading...