The state of Illinois is filling in the gap left by insurance companies that have refused to cover business interruption claims for small to mid-size businesses that have had to temporarily close or limit operations due to state-mandated closures to stop the spread of COVID-19.
“The State of Illinois recognizes the immense burden the COVID-19 crisis has placed on many businesses across our state, with many facing a disproportionate impact due to their inability to operate, loss of revenues or recent property damage due to civil unrest,” the Illinois Department of Commerce & Economic Opportunity (DCEO) announced in a news release. “As part of a broader $900 million community and business assistance program announced by Governor Pritzker on June 17, DCEO will make available two new business assistance programs. These programs will direct working capital to help businesses recover quickly – with capital funds to help businesses sustaining damages restore and repair.”
The DCEO began accepting applications June 23 for the first round of Business Interruption Grants (BIG), which will provide $60 million to up to 3,500 businesses that experienced limited ability to operated due to COVID-19-related closures. DCEO will begin distributing funds to qualifying businesses beginning in early July.
The first wave of funding will give priority to small businesses that have been heavily restricted or completely shut down during the pandemic. To be eligible for funding, businesses must have experienced extreme hardship, demonstrated by eligible costs or losses in excess of the grant amount, since March and may continue to face depressed revenues or closures. They must also have been in operation for at least three months before March 2020. “An emphasis will be placed on those businesses that are located in areas that have experienced recent property damage due to civil unrest, exacerbating the economic impacts of COVID-19,” ECEO said.
The program specifically supports businesses in disproportionately impacted areas, bars and restaurants unable to offer outside service, barbershops and salons, and gyms and fitness centers.
Many small and mid-size businesses suffering from government-mandated closures or restrictions due to COVID-19 have tried unsuccessfully to file claims on their business interruption insurance. Business interruption insurance is part of a business owners policy that provides coverage for payroll and operational expenses in the event a business must close due to a disaster, such as a fire or a tornado. But insurers are rejecting these claims arguing that pandemics are not covered.
Many small business owners across the country are fighting back and filing lawsuits against their insurance companies for denying coverage they believe they are entitled to. Beasley Allen is actively pursuing cases with clients whose insurance companies denied their business interruption claims. Dee Miles, Head of our Consumer Fraud Section, Rachel Boyd and Paul Evans are spearheading this litigation for our firm. They would like to talk to you about any potential claims.