Brick-and-mortar retailers are fighting for survival in this pandemic economy, and some just aren’t making it.
On Thursday, Century 21 Stores, a clothing chain mostly in the Northeast, filed for Chapter 11 bankruptcy. The company said the pandemic played a role, but it also blamed its insurance company.
Century 21 didn’t mince words, saying its insurers had “turned their backs on us at this most critical time.” The company says that despite having business interruption insurance, when business was interrupted due to COVID-19, claims weren’t paid out.
In this case, like many others around the country, insurers say they don’t have to.
“The insurance industry charges for a policy based on the risks,” said Loretta Worters, vice president of media relations at the Insurance Information Institute, which represents the industry. “Now, because it’s a pandemic, it was never taken into the the rates when an insurance company provided that kind of coverage. So if you’re not paying for that, imagine the amount of loss the insurance industry would pay.”
In court fights all over the country, the industry is pointing to clauses and exclusions in contracts arguing the industry isn’t obligated to, nor can afford to, absorb the pandemic losses.
In the meantime, business owners are wondering what use their insurance is.
“And then you’ll also see a lot of folks are getting renewal notices for their policies for next year, and a lot of them, their rates are going up,” said Davis Senseman, a lawyer working with the small business advocacy group Main Street Alliance. “In some cases to 300%,” Senseman said. “So it’s understandable that small business owners are saying, ‘Wait a minute, if the industry didn’t pay out because of these exclusions, why are the rates going up?'”
Both insurance companies and business organizations are lobbying Congress for a fix. Leon Buck, vice president of government relations, banking and financial services at the National Retail Federation, said insurers need a federal backstop, using the program developed after 9/11 as a model.
“What it speaks to is if there’s another terrorism event, than the insurance companies will cover a portion and the federal government will cover the majority of the costs,” Buck said. “And that’s key, because after 9/11, no one was able to get insurance.”
Century 21 noted that its insurers did help it recoup losses in New York after 9/11, but the pandemic was the crisis it could not survive.
What’s going on with extra COVID-19 unemployment benefits?
It’s been weeks since President Donald Trump signed an executive memorandum that was supposed to get the federal government back into the business of topping up unemployment benefits, to $400 a week. Few states, however, are currently paying even part of the benefit that the president promised. And, it looks like, in most states, the maximum additional benefit unemployment recipients will be able to get is $300.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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