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Small business owners fighting insurance companies during pandemic

Posted at 9:46 PM, Mar 19, 2020
and last updated 2020-03-20 13:46:21-04

Small businesses are scrambling to keep their companies afloat during the COVID-19 pandemic and keep their employees paid too.

One local business owner told us she took precautions to prevent a loss of income if there was an emergency like the one we're facing now, but she said her insurance company left her high and dry.

Marla Poytinger owns Bars and Recreation Inc., which runs two axe-throwing bars, a painting studio, and an indoor miniature golf course.

She closed her businesses on Monday after the government told bars and restaurants to do their part to help stop the spread of coronavirus.

Poytinger pays for something called business interruption insurance, which is supposed to help in emergencies like this. But her insurance company denied her claim.

"Let's look at what the intent of the policy is," Poytinger said. "Let's look at what both sides agree is necessary and would be covered and not worry so much about what's happened in the past."

She said they denied the claim because the policy did not explicitly say it would cover a loss due to a pandemic.

"It doesn't specifically call out this scenario, and therefore the insurance company is saying oh sorry, nothing we can do," Poytinger said.

Small businesses across the country are struggling to get insurance companies to pay up.

In New Jersey, state lawmakers introduced a bill this week that would force insurance companies to pay out business interruption insurance claims for companies closing during this pandemic.

No bill in Wisconsin would do that currently, but the Wisconsin Economic Development Corporation (WEDC) is offering small business grants to help companies get through the COVID-19 pandemic.

"This is an important first step by WEDC in helping the more than 92,000 small businesses in our state and their employees who are facing lost revenues, missed paychecks, and other uncertainty due to COVID-19," said Gov. Tony Evers in a news release. "As the impacts of COVID-19 continue to be felt, we will be relying on WEDC to develop additional innovative programs to meet the needs of our state."

The grants would pay up to $20,000, but Poytinger is worried they could take weeks to process.

"They're all saying you have to make a call in the next couple of days, so I need help right now, immediately," she said.

Poytinger's insurance company did not respond to our request for comment.

Small business owners looking for guidance with insurance companies can connect with the Wisconsin Office of the Insurance Commissioner.

You can also learn more about the small business grants through WEDC, along with other programs on their website.

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