NFIB

Small Business Owners Wondering If Insurance Will Help Cover Losses
09/24/2001

Small businesses directly affected by the Sept. 11 terrorist attacks may be covered under a "business interruption" clause included in many plans but rarely used, the Washington Post reports.

While businesses in and near the World Trade Center towers were physically damaged, federal restrictions on travel and the police shutdown of Lower Manhattan forced hundreds of small businesses to close for days. "Business interruption" insurance covers businesses when they are shut down for reasons other than floods, fires or earthquakes. Separate coverage must be purchased for those instances.

But the unprecedented events surrounding the terrorist attacks have left many insurance companies unsure of how to handle claims. In the case of small businesses at Reagan National Airport, travelers were restricted from the terminal areas for days, but the airport remained technically open.

Melton McGuire, owner of National airport restaurant Virginia Beverage Co., is unsure of whether his insurance will cover his losses since there was no physical damage to his facility. McGuire told the Washington Post that if the airport remains closed and his insurance does not cover the situation, then he will probably have to lay off employees.

NFIB-member Darci Castillejos owns a restaurant at a small aviation airport in California, thousands of miles from where the attacks took place. But her business has still been affected. With the airports' two flight schools still unable to operate, Castillejos has had to reduce her hours of operations as well as cut the hours of her staff. She is unsure of whether her policy will cover her losses.

"It's devastating," she says. "I'm down by at least 60 percent."