Most small business insurance policies don’t cover pandemics, but new legislation may change that


PROVIDENCE, R.I. (WPRI) ─ The pandemic has forced hundreds of Rhode Island businesses to enforce social distancing restrictions or close completely, leaving many business owners wondering what’s next.

In an effort to protect small businesses across the state, the Federal Hill Commerce Association is pushing for new legislation to ensure that insurance companies assist business owners during the pandemic.

Executive of the Federal Hill Commerce Association Rick Simone said not all insurance companies are willing to help businesses because of an “interruption clause” which states that they don’t provide assistance during pandemics.

“So the first instinct for most businesses is to file an insurance claim,” Simone said. “But the majority of insurance policies have a clause that’s buried and hidden, that talks about how it doesn’t cover viruses.”

Simone said New Jersey, among a couple of other states, is considering similar legislation.

Rep. John Lombardi is also pushing for the legislation and said small businesses in Rhode Island need financial support to get to the other side of this crisis.

“We need bridge loans, to get to the Small Business Association loans, to keep the doors open, to keep the people working,” Lombardi said.

Simone said on Federal Hill alone, 2,300 people have filed for unemployment. He said it’s important insurance companies step up and help these businesses before its too late.

“These businesses need to know there is something they can rely on and can take care of them right away,” Simone said.

Simone fears that if help doesn’t come soon, Federal Hill may never look the same. He said 41 of 54 businesses on Federal Hill that have applied for assistance have already had their claims denied.

Some business owners have even told him they may never reopen.

Web Extra: Extended interview with Rep. John Lombardi

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