The Upton Group, a national insurance agency specializing in food delivery insurance, has called for the federal government to create an insurance program for the food industry, as the COVID-19 pandemic continues to pose a major economic risk for all businesses.
A release from the agency explained that the standard business owner’s policy provides for loss of income, including actions by a civil authority. But such policies usually require physical damage at the premise, or off premise, to trigger coverage. By that definition, a virus does not constitute physical damage and thus does not trigger loss of income insurance.
“We have clients and non-clients calling every day asking about insurance for the significant losses of income they are facing and local, county and state agencies and governments ordering restrictions and total shutdowns of their businesses for an indefinite period of time,” said Upton Group president Jason Upton.
“This crisis has revealed a major exposure for restaurants that is largely uninsurable,” the president continued. “These businesses are providing millions of jobs across the country and a shutdown or restrictions in how their restaurant operates creates a significant financial challenge that unfortunately some will not economically survive.”
The release also noted that commercial policies typically have exclusions for viruses and bacteria via endorsements specifically designed to abate a court seeking to interpret coverage when there was never any such intent.
“I believe while we have yet to see the worst of what the near future holds, yet one thing is clear: the economic loss to these restaurants and other small businesses is significant,” Upton stated.
Upton cited the Terrorism Risk Insurance Act (TRIA), which the federal government signed following the September 11, 2001 terrorist attacks – he hopes that a similar insurance program modeled after the TRIA will be implemented. The president suggested that the insurance program would be paid for by each policyholder purchase, and the need for such a bailout in the future can be reduced or even eliminated once businesses have no more use for it.