The U.S. Chamber of Commerce is taking a stand against small businesses struggling to survive coronavirus lockdowns by siding with insurance companies that are denying pandemic-related business interruption claims.
One of the most powerful and aggressive lobbying forces in the country, the U.S. Chamber sent a letter to Congress on April 29, urging two House committees to place the staggering financial burden of floating small businesses on U.S. taxpayers, either through a federal trust fund or government-sponsored insurance.
Restaurants, bars, bakeries, daycare centers, specialty shops, salons, and gyms are some of the small businesses that have been blindsided by denied business interruption claims after state and local governments forced shutdowns of all “nonessential” companies.
Many insurers have shielded themselves from pandemic-related claims with the inclusion of language in the small print of their policy terms excluding “loss or damage caused by or resulting from any virus, bacterium, or other microorganism.” Other policies don’t specifically cover losses related to global pandemics.
The blanket denial of business interruption claims has prompted several states to introduce legislation that would mandate insurance companies to pay the claims at least partially – an idea that the White House has said it supports.
“You have people that have never asked for business interruption insurance, and they have 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,’ ” Donald Trump said, according to USA Today. “We can’t let that happen.”
But the U.S. Chamber has the resources to buy political favors on Capitol Hill. In 2019 alone, the U.S. Chamber of Commerce spent $77 million on lobbying efforts – more than the amount spent by 5,500 other special interest groups, according to the Center for Responsive Politics, a nonprofit, nonpartisan organization that tracks the effects of money and lobbying on elections and public policy.
In its letter to Congress, the U.S. Chamber asserts that mandating pandemic coverage in business interruption policies isn’t only unconstitutional, it would devastate the insurance industry.
Such bold assertions may be hyperbole, but several legislators backing measures that would work for business say the insurance industry shouldn’t be allowed to collect millions of dollars and then “cut and run” when it’s time to pay on claims.
New Jersey Assemblyman Roy Freiman, a Democrat, was the first legislator to introduce a bill that would require insurers to provide coverage for coronavirus claims in business interruption policies.
“I’ve heard from restaurants and their association and groups of dentists getting hammered by this,” Mr. Freiman said, according to USA Today.
“I understand the concern they didn’t write policies for this incredible peril,” Freiman said, “but we must find a balance between insolvency and 100% denials of claims.”
Bob Hunter, a former Texas insurance commissioner and current director of insurance at Consumer Federation of America, told USA Today that court battles over coronavirus coverage are likely to last for years. He said the lobbying dollars flowing to the U.S. Chamber of Commerce are being used against them.
“We’re paying to build our own scaffold for where they’re going to hang us,” Mr. Hunter said.
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.