How Can Hotels and Restaurants Stay Afloat Amidst the Pandemic

​With strict travel restrictions implemented and people staying in their homes, there is a growing financial strain for the hotel and restaurant businesses. Not to mention that civil authorities have forced companies to shut down, reservations being canceled, and supply services being delayed; these businesses are in a crisis.

Insurance Can Solve the Decrease in Cash Flow
Business Interruption Insurance can provide coverage towards businesses that have their operations disrupted. However, coverage may only be obtained if there is a direct physical loss towards the property. Since the coronavirus is not a physical object, it will be complicated for insurers to prove how the virus caused direct physical damage to the establishment.

Specialized Insurance Policies
There are specialized insurance policies for hospitality and healthcare services. One specific clause is within the Business Interruption in which provides coverage when “communicable or infectious” diseases infect employees. 

Infected Workers Can Obtain Coverage
Infected workers may also obtain coverage once infected with the virus. Workers’ Compensation Coverage allows financial assistance towards individuals infected with the virus in a work-related event. Work-related events include large gatherings, which are usually held at restaurants and hotels.   

Civil Authorities May Become a Solution
When civil authorities prohibit or limit access to business establishments, business owners may also obtain coverage. The coverage goes into effect, depending on the wording on the insurance policy. Some policies consider this as a physical loss. Thus, when considered as a physical loss obtaining coverage from Business Interruption Insurance would be less complicated.

Contingent Business Interruption Insurance
There are cases in which operations would not be possible for restaurant owners due to the delays in the shipping of supplies. With the pandemic going on, travel has been more restricted, and procurement of supplies would be more difficult. 

With that, this type of insurance would provide coverage for restaurant owners when operations are at a halt. However, this may only be utilized within the pandemic since the delay is not on the supplier’s or policyholder’s fault.

Conclusion
During these trying times, insurance policies may provide some financial relief for restaurant and hotel establishments. The coverage depends on the wordings presented in the plan. With that, hotel and restaurant owners must review their existing insurances and obtain coverage to keep their business afloat.

At Desmond Insurance, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (859) 491-5100. Get your free quote today by CLICKING HERE.