Brooklyn Legislators Want Insurance Companies To Pay Up

New York State Senator Andrew Gounardes representing Southern Brooklyn is teaming up with Assemblymember Robert Carroll, of Brooklyn’s 44th district, to introduce legislation to require COVID-19 related incidents to be covered under business interruption insurance policies. 

The policies, which many restaurants already have, cover income losses in the event of a disaster. This bill allows restaurants who were covered when Mayor Bill De Blasio declared a state of emergency on March 7th to receive benefits from their plans. 

Assemblymember Carroll, who is the drafter and prime sponsor of the bill, said in a release that it was “clear” the federal loans were not covering businesses’ losses. 

“The insurance industry is sitting on $900 billion in reserves while small businesses who have paid business interruption premiums for years have their claims denied over and over again because the insurance industry claims COVID-19 doesn’t constitute a business interruption. This is absurd, greedy, immoral, and factually incorrect,” Carroll continued, especially when businesses sometimes pay upwards of $10,000 per month to maintain this insurance. This new legislation would only cover businesses with 250 employees or less. 

Kelly Hayes works full-time as a teacher, now remotely, is also a partner at Gowanus Gardens, a bar and restaurant on 4th Avenue told Bklyner: “People need help to get through this. It’s crazy. It’s going to be really hard coming back, too,” Hayes said of the new bill. Her restaurant is now only open for take-out and delivery four nights a week, and doing much less business than it was previously. 

George Constantinou, owner of Bogota, Mitti Mitti, and Medusa Greek Taverna in Park Slope, as well as a restaurant in New Jersey, says he’s had more luck with delivery, and that things are starting to pick up now. All four of his restaurants are covered under business interruption insurance. He applied right when shutdowns happened, but was told he likely wouldn’t receive anything since viruses and pandemics aren’t typically covered.

“I think [this is] great news, because right now all the focus has been on the PPP loan, and that’s great news for businesses to get the PPP loan, but that really can only be used for payroll, rent, and utilities. That means other vendors like the meat guy, the fish guy, the produce guy, the exterminator— there are no funds to cover that,” Constantinou said. “March, April, May, and June I refer to as the golden period every year. Those are always the busiest four months for my restaurants, and to enter the beginning of March to be shut down is very devastating for the livelihood of my business, so business interruption insurance would be much needed.” 

The bill has gained the approval of the NY Hospitality Alliance, who called the legislation “bold.”