Jeramey Jannene

Insurer Denies Claims From Taverns

Coverage for "Civil Authority" shutdowns has exclusion for "loss due to virus."

By - Mar 18th, 2020 10:09 am
Axe throwing. Photo courtesy of Bars & Recreation.

Axe throwing. Photo courtesy of Bars & Recreation.

The owners of a group of Milwaukee bars thought they were doing the right thing paying for business interruption insurance.

The policy, which when combined with standard business insurance costs over $37,000 per year, even includes a clause on “civil authority” shutdowns. When the City of Milwaukee closed bars and restaurants Monday night, Marla and David Poytinger had expected their four businesses and 60 employees to be covered.

That isn’t the case according to Robertson Ryan and Associates, who sold the Poytingers’ firm Bars & Recreation a policy from Neenah-based SECURA Insurance.

The Poytingers, who own and operate AXE MKE, Nine Below, NorthSouth Club and Splash Studio, are used to dealing with insurance: people throw axes and swing golf clubs in their bars.

But Marla Poytinger said the response she received to her inquiry if a government shutdown of her business would be covered is “heartless.”

“Business Income coverage only applies if there is direct physical loss of or damage to property at the premises. Government shutdown (Civil Authority) only applies if there is direct physical damage to property other than your own which prohibits access to your property. See the coverage form attached,” is the response sent by a Robertson Ryan representative to Poytinger.

Jayne Preuss of Robertson Ryan & Associates told Urban Milwaukee that the standardized policy from Insurance Services Office Inc. includes viruses as an exception. The Poytinger’s policy, provided to Urban Milwaukee by Bars & Recreation, includes a page noting an “exclusion of loss due to virus or bacteria.” Marla said it’s suspect that the exclusion is being brought up now when it wasn’t included in the first email to her.

“Unfortunately this is happening to everybody, not just her,” said Preuss, suggesting that other bars and perhaps restaurants purchasing such insurance are not getting coverage.

What comes next?

“The most important thing right now is our employees,” said Poytinger in an interview. The company has approximately 15 salaried employees who continue to receive full pay and benefits and 45 hourly employees.

Marla told Urban Milwaukee that she and husband have committed to paying the hourly employees based on their schedule for this week and estimated tips. She said they will revaluate over the weekend when information on potential federal and state aid packages is available.

She also hopes the insurance company does the right thing. “This Wisconsin company is denying coverage based on a loophole,” said Poytinger.

The Poytingers’ aren’t alone. Nine Below is located underneath Beans & Barley restaurant and market at 1901 E. North Ave. Owner James Neumeyer said he’s in the same situation and has been denied coverage from an insurer.

“If there was a pandemic and people rioted and tore up the store, that would be covered,” said Neumeyer. “It’s a really terrible situation for restaurants.” (Beans & Barley, meanwhile, remains open for carryout and delivery.)

Multiple calls to the Tavern League of Wisconsin were met with a busy signal as Governor Tony Evers announced a statewide shutdown of in-house patronage of bars and restaurants starting at 5 p.m.

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