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Some business owners being turned away after insurance claims

Local business
Posted at 5:57 AM, May 27, 2020
and last updated 2020-05-27 12:42:20-04

CORPUS CHRISTI, Texas — As local businesses scrambling to reopen because of the pandemic, it's getting worse for many of them as they try to make insurance claims.

Making matters worse, their business interruption insurance is being turned away when they file claims.

“People are getting really hit right now," Water Street Restaurants president Richard Lomax said. "Understand how bad this is going to be in the next three to four months if things don’t improve. You are just going to see the whole ecosystem of what makes cities great get crumbled up if we don’t find a solution,”

Many area restaurants, small businesses, and even private healthcare facilities have filed lawsuits against insurance companies after claims for damages due to the coronavirus pandemic were denied, despite having paid premiums for their policies.

“The impact of this goes far beyond what insurance companies think about, but this is no different than part of my business losing business because of water damage or a fire," said Jade Malay, a local nurse practitioner. "There is no difference; it impacted revenue, that is the bottom line,”

“If you have been in business a long time, you can afford to take a hit usually, but if you are just starting out, you can’t,” said Dr. Mario Martinez.

This is becoming a huge battle, not only in Texas, but also nationally, as insurers claim that their coverage only applies if a shutdown is based on physical damage to a business.

“They deserve compensation because the civil authority, being our government, told a lot of people to stay home, shelter in," local attorney Joe Flores said. "What happens? Business goes down. Those businesses who paid premiums every month should be compensated because their insurance contract says so.'

Many insurance policies, including those that include business interruption coverage, do not include coverage for illnesses caused by viruses or bacteria or viruses such as COVID-19.