Asset Team Archives

COVID-19 has brought a lot of uncertainty to Small Businesses across the United States. Many business owners are feeling the financial pressures brought on by mandatory closures, or decreased traffic as a result of shutdowns. Things are changing daily as well, so it can make even the most veteran businessperson’s head spin.

What every Small Business Owner needs to know as they navigate COVID-19:

Make sure your employees know about the resources available to them:

- Federal tax filing and payment deadline postponed until July 15, 2020. Many states have extended their filing deadlines as well.
- Student Loans do not accrue interest, and the lender may put some loans in Forbearance if the borrower cannot pay due to COVID-19.
- The IRS will directly deposit Federal Stimulus checks (amounting to $1200 per individual, $2400 if married, plus an additional $500 per child, with applicable limitations) for those who have provided their banking information.

If you must lay off employees, recognizing the increased Federal Unemployment Benefits could provide you with peace of mind.

- Unemployed workers will receive an extra $600 per week, added to their regular benefits. Authorities have approved this augmentation until July 31, 2020.
- For some employees, the increased Unemployment Benefit Payments may be higher than their regular pay.

The CARES Act – Payroll Protection Program (PPP)

- Loans are available for eligible Small Businesses, without having to provide a personal guarantee or collateral
- Loans are for the amount of 2.5 X your average monthly payroll costs for the last 12 months. This includes:
  - Salary, Wage, & Commission
  - Payment of cash tips
  - Vacation, Sick, Parental, or any other Medical Leave
  - Allowance for dismissal or separation
  - Payment for group health insurance
  - Payments for retirement benefits
  - State & Local taxes assessed on the compensation of the employee
- If you maintain your employees throughout the crisis, these loans will be forgiven up to the amount of 8 weeks of expenses in the following categories:
  - Total payroll costs as determined above
  - Interest on mortgages held by the business
  - Rent on a leasing agreement
  - Payments on all utilities
- Applications are to be submitted to your bank

Emergency Injury Disaster Loan (EIDL)

- Loans up to $2M are available to small business that have been impacted by COVID-19
- These loans have an APR of 3.75% with terms up to 30 years
- These working capital loans can be used to pay fixed debts, payroll, accounts payable, and other bills that the disaster would not have affected.
- These loans do not intend to replace lost sales, lost profits, or provide assistance for expansion.
- Applicants make applications via the SBA Disaster Assistance Program at disasterloan.sba.gov.

Economic Injury Disaster Loan Emergency Advance

- This loan advance will provide up to $10,000 of economic relief to business that are currently experiencing temporary difficulties
- This loan advance will not have to be repaid
- The application is brief and can completed online at covid19relief.sba.gov

Delay the Payment of Employer Payroll Taxes

- Employers can defer payments of their share of the social security tax over the following two years.
- First half due 12/31/2021 and second half due 12/31/2022.
- You are not eligible to defer this payment if you are participating in the Payroll Protection Program.

Business Interruption Coverage provided by your insurance carrier

- Many business and commercial property policies include coverage for “Business Interruption:
- You could have an entitlement to an insurance payment for loss of revenue when closure stems from property damage and/or government mandate.
- Authorities frequently review the insurance industry to figure out how to cater to the needs of business owners.
- Premier Claims offers complimentary policy reviews to see if you have coverage.

Click Here to upload your policy and request your complimentary review by our legal team.

Written by CFO Melissa Hurrington

The Coronavirus global pandemic has significantly impacted not only individuals throughout the world but businesses and their employees’ livelihoods. The United States pledges almost $1 trillion to bail out big businesses and banks, aiming to soften outcomes. However, this action will only help limited small businesses and won’t safeguard the future of everyday working Americans. With an uncertain timeline ahead for the economic impact, many businesses will experience interruption and may fail, resulting in an ever-growing unemployment rate, and a frightening time for those directly affected.

For businesses grappling with prolonged closures due to COVID-19, Premier Claims, a National Public Adjusting Firm, brings hope. We stand by policyholders, advocating for property and business insurance claims. While policies usually cover direct physical loss, extensions might also cover lost revenue during a business interruption. There may also be further coverage for business interruption based on a civil authority shutdown.

Business Interruption Coverage

This coverage typically allows for the recovery of lost income and associated extra expenses. This coverage requires the interruption resulting from direct physical loss or damage of the insured property caused by a covered peril. As many states mandate businesses too close, they are specifically referencing that this is being done, at least in part, due to the damage the virus is doing to the property. This is opening up the door to potential business interruption claims.

Civil Authority Coverage

This coverage is designed to apply when access to an insured’s property is hindered by a civil authority’s order due to physical damage. The damage must result from an insured peril affecting nearby property. This coverage also is opening the door to potential claims.

Whether or not you are going to have coverage is very dependent on your policy. Many policies have an exclusion of loss due to viruses or bacteria. These exclusions generally mean that the carrier will not pay for loss or damage caused or resulting from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness, or disease. If your policy has this type of exclusion, then recovery under business interruption or civil authority will generally not be a possibility.

Across the nation, states propose bills for COVID-19 business interruption coverage, despite virus exclusion concerns. While questioning their constitutionality, the application of these coverages remains uncertain. The best thing you can do right now, is to review your insurance policies and see if coverage is available. If an exclusion does apply, then you should monitor some of these bills if applicable to your state.

During this time our firm will be conducting complimentary policy reviews and assessments to assist those affected by these business closures. In addition, Premier Claims is dedicated to reducing our fees in handling the claim in cases where coverage exists, and a claim can be filed. We’re here to let businesses and commercial property owners know that we are a resource.

Financial Resource Guide for Small Business Owners to navigate through COVID-19