Does a PPP loan have an impact on insurance coverage?
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Editor’s Note: Our question this week examines the impact of loans and stimulus payments during the COVID-19 pandemic on a restaurant’s loss of income.
Question: My client, a restaurant, suffered physical damage when a brick went through a window for manifestations of social unrest Last year. The restaurant closed for several days to clean up and repair the damage.
We submitted the claim to the carrier, and the carrier paid for the lost revenue but refused to pay the payroll that the restaurant continued to pay employees during the shutdown. The policy is based on the ISO and states that it will pay for the actual loss of business income you suffer. The carrier says that because the restaurant received a Paycheque Protection Program (PPP) Loan, the PPP loan pays the payroll and the restaurant has suffered no losses. We believe that the PPP loan (not canceled yet) has nothing to do with political language. Your thoughts?
– Georgia Subscriber
Analysis: Coverage questions regarding business income and related losses are among the most frequent inquiries we receive from subscribers. It’s not that this is such a difficult hedge, but rather because there are so many different types of actions that can cause a business to shut down and because of the complications that can arise. to restart the business after a loss. With the coronavirus pandemic occurring simultaneously with social unrest, small businesses, in particular, have experienced long periods of shutdown and additional expense to keep employees and customers safe. Some of these businesses have received loans and stimulus payments.
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