The Next Major Battle Pits Restaurants Against Insurers

Authored by Mike Shedlock via MishTalk,

A big lobbyist fight is underway in Congress. It pits restaurants against insurers.

Hard-hit restaurants press business-interruption claims even on policies that excluded pandemics.

For example, Wolfgang Puck does not have a pandemic policy.

It expects Congress to take care of it.

The Wall Street Journal reports Restaurants vs. Insurers Shapes Up as Main Event In D.C. Lobbying Fight

Restaurants and their allies are lobbying President Trump and Congress to press insurance companies to cover “business interruption” claims stemming from the coronavirus, even where restaurants have policies that exclude losses from pandemics.

While insurers do offer coverage, those policies are significantly more expensive than standard business-interruption policies, and few restaurants carry them, industry representatives said. But restaurants and some U.S. lawmakers say the business-shutdown orders in states and cities should constitute business interruptions under their existing policies

Insurers are pushing back hard with the help of some Republican senators and conservative groups, saying retroactive changes to coverage policies and threats of lawsuits from restaurants could undermine the nation’s insurance system.

"Big" Bedfellows

Cheatsheet reports Celebrity chef Wolfgang Puck has joined fellow renowned chefs Thomas Keller, Daniel Boulud, Jean-Georges Vongerichten, and Dominique Crenn to form BIG, (Business Interruption Group), a new national legal, political, and communications campaign launched in partnership with an industry-savvy insurance attorney.

The group has spoken by phone to President Trump for his assistance in communicating with insurance companies, who have, for the most part, denied restaurants assistance during the pandemic. Specifically, they are requesting the U.S. president to step in on their behalf. And it looks like Mr. Trump is sympathetic.

Puck said, “We were encouraged by our conversation with the president about the urgent need to help the restaurant industry. All of us paid business interruption insurance for years to protect the livelihood of our employees. If the restaurant industry collapses, it has a massive effect on the entire economy. . .”

Understanding the Legal Battle

  • Those with no business interruption policy have no claim. 

  • Restaurants that do have business interruption policies ought to be covered unless the policy specifically excludes pandemics. 

  • Policies cannot be changed after the fact by Congress or anyone else, except by universal agreement of all of those who the policy covers. 

The disagreement is whether the shutdown is pandemic-related or government-related.

Lobbyists have taken sides. 

I believe this should be up to a court of law with the decision depending on specific policy language.

It should not be up to Congress to interpret law, nor to make businesses whole for those companies with inadequate insurance, nor insurance companies who go burnt by offering pandemic insurance.