Business Interruption Claims

Hospitality is one of the biggest industry sectors in the world.  It physically connects businesses to each other and consumers to businesses.  Shutdowns, quarantining, and consumer fears of COVID-19 have resulted in serious economic damage to this industry.

• Lodging: The bottom line is that if people are not in hotels, motels, vacation rentals, or resorts, those businesses have no revenue.  Conventions and weddings also generate significant revenue for these venues, but restrictions have resulted in the loss of billions for cancelled events.  It is expected that the coronavirus pandemic may result in as many half of the 8 million workers in this industry being laid off or losing their jobs entirely.
• Travel & Tourism: The COVID-19 outbreak brought travel to a halt. This slump in travel is projected to cause a $900 billion hit to the U.S. economy.  It is just not the airlines and cruise lines that have taken a toll, but all of the small businesses that depend on tourism and support the travel industry.
• Food & Beverage: Small businesses in the food and beverage industry are among the hardest hit by the COVID-19 outbreak.  Fast food franchises, diners, caterers, bars, bakeries, and coffee shops have suffered significantly reduced business as well as disrupted supply chains.  COVID-19 and governmental restrictions brought “out-of-home” food consumption to a near standstill.  The virus outbreak may also bring about long-term and wide-spread changes in consumer interest and demand for such services.  Industry experts project that the effects of COVID-19 could eliminate 10-20% of restaurants by the end of the year.
• Entertainment: Theme parks, movie theaters, casinos, and concert venues have been forced to close to the public.  Sports, at all levels, have been shut down due to COVID-19 impacts. Thousands of small businesses that either support or depend on this industry have suffered significant losses.

• Therapists & Counselors: Governmental stay-at-home orders have limited the ability of therapists and counselors to conduct in person sessions.
• Medical Care/Service Providers: While news media has focused on hospitals being overwhelmed by COVID-19, the reality is that the vast majority of healthcare providers have suffered tremendously by governmental restrictions on “non-essential” care.  Dentists, chiropractors, physical therapists, primary care physicians, and various specialists providing non-emergency care have been forced to close their practices.
• Hair and Nail Salons & Barber Shops: Mandatory shutdowns and stay-at-home orders forced many personal care businesses such as hairstylists, manicurists and masseuses to close shop. Even when restrictions are lifted, these businesses are likely to continue to suffer financial losses as fewer people may seek out such services due to the threat and/or fear of COVID-19.
• Veterinarians: Regulations and stay-at-home orders forced many veterinary clinics to eliminate non-emergency services, such as well checks, that typically make up the bulk of the practice’s revenue.
• Landscaping: With the intention of ensuring safety of residents, many state governments issued “stay-at-home” orders and designated certain businesses as essential. In some states, such as Michigan, landscaping was left off the “essential business” list. The impact has been financially disastrous for many landscaping and property maintenance companies.
• Construction Trades: The U.S. construction industry is a more than $1 trillion industry supported mostly by small businesses.  Government shutdowns and unemployment have had a tremendous impact on all construction trades engaged in new home construction and renovation.
• Gyms, Health Clubs: Gyms, health clubs, and yoga studios are part of the $100 billion fitness industry.  COVID-19 forced  these small businesses, which are largely dependent on physical locations and on-site staff, to shut their doors and lay off employees.
• Tow & Repair Shops: With the stay-at-home order in place, roadways have been almost empty. And with fewer cars on the road, there are fewer accidents and vehicle issues, so tow truck drivers and repair shops have been mostly sitting idle.

The COVID-19 pandemic hit manufacturers in an unprecedented way. Across the world, demand, supply and workforce availability were all impacted at essentially the same time. Many manufacturers that supply personal care or medical products have experienced disruptions in supply chains. Manufacturers in other sectors have experienced dramatic drops in demand and have had to reduce or cease operations.

As quarantined consumers turn to online shopping, brick and mortar businesses that are dependent on foot traffic have been suffering a massive slump. Flower shops, car dealerships, clothing stores, bookstores, jewelers, greenhouses, and sporting goods stores have all been forced to close their doors. This has resulted in tremendous financial losses to these businesses and in turn, losses of important local and state tax revenues.

As businesses across all industries shutdown, commercial tenants struggle to pay rent which impacts a landlord’s financial ability to make mortgage payments. While mortgage interest rates have seen all-time lows, stay-at-home orders have negatively impacted many real estate companies.