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SBAM encourages state-sponsored relief for shuttered small businesses using the Business Interruption Insurance system

March 19, 2020

To help small businesses shuttered by the state due to the COVID-19 pandemic, the Small Business Association of Michigan is encouraging the state to use the Business Interruption Insurance system to help those affected.

Business Interruption Insurance covers the loss of income that a business suffers after a disaster. Though many small businesses have these types of policies, they don’t cover pandemics, viruses or government action.

“These are unprecedented times in our country and while we support the preventative actions being taken, we must also support small businesses whose livelihoods are being decimated during this time,” said Brian Calley, SBAM President. “The state covering Business Interruption claims for shuttered or reduced businesses is a common-sense solution that will help ensure our economy can rebound once this crisis subsides.” 

SBAM is calling on the state to use this system to cover the costs for small businesses, beginning with those who have been directly ordered to close down or scale back due to the COVID-19 pandemic, followed by an immediate review of additional small businesses who also should be included. Under the proposal, businesses could apply for reimbursement from the state or the Michigan Strategic Fund, processed through the existing Business Interruption Insurance system or the Michigan Department of Insurance and Financial Services.

If implemented by the state, once a business is forced to close, they could apply for funds through the traditional Business Interruption Insurance process but paid for by the state.  The normal claim submissions would include providing documentation including tax returns, annual and monthly profit/loss statements, list of events/orders canceled or food destroyed due to closure and a listing of extra costs incurred due to the shutdown.

SBAM has already begun discussions about this proposal with state lawmakers and the Governor’s office and hopes it can be put in place in the near future. 

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