Friday, October 31, 2014

When a Small Business Comes Into Contact With Ebola (BusinessWeek)


The Gutter bar and bowling alley in Brooklyn’s Williamsburg neighborhood
The Gutter bar and bowling alley in Brooklyn’s Williamsburg neighborhood
Reports of the first Ebola case in New York City have included a detail that might make small business owners cringe: Craig Spencer the 33-year-old doctor who had recently returned from working with Ebola patients in Guinea, visited a Brooklyn bowling alley before he became aware of his symptoms.
While the health of Spencer and those close to him is a far graver concern, his case also underscores the risks faced by businesses touched however briefly by Ebola. Gutter, the bowling alley visited by Spencer, plans to reopen quickly. Other businesses have struggled.
Coming Attractions Bridal & Formal, a family-owned business in Akron, has been closed since Oct. 16, after a Dallas nurse who had contracted the virus spent three hours in the shop looking for a wedding dress. Earlier this week, owner Anna Younker posted photos of cleaners in hazmat suits decontaminating the space with ultraviolet torches that look like 5-foot-tall bug zappers.
Despite taking that precaution, Younker said in a Facebook (FB) post that her shop would remain closed until Nov. 4, a full three weeks since the patient’s visit, to let fears die down. Meanwhile, Younker and her husband are scrambling to deliver wedding dresses to customers.
Insurance could cover some of Younker’s losses if she carries a business interruption policy, says Linda Kornfield, a Los Angeles-based insurance lawyer at Kasowitz, Benson, Torres, & Friedman. Such policies cover losses incurred when a business closes because of physical damage from a disaster. That usually includes the revenue a company would have made if it hadn’t closed, as well as costs incurred to reopen.
“The interesting question here,” says Kornfield, “is whether the presence of Ebola virus at your company facility is some sort of physical damage.”
The language of such policies can vary, but it’s common for them to cover businesses that close because of an order of civil authority. A business closed down by health officials could win a claim even if the insurer didn’t view contamination as physical damage.
One thing insurance won’t cover is loss of business because fear keeps customers away. The manager of Back Country Bar-B-Q, a restaurant located down the road from the Dallas hospital that treated the city’s Ebola cases, told a local TV stationthat sales fell off 40 percent in the weeks since the case was discovered. There’s probably not insurance for that.
Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

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