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Thousands of small businesses around the state were closed down for days by the recent power outage. Now that the lights are back on, many are working on insurance claims to recoup their losses. But as WNPR’s Harriet Jones reports some are in for a nasty surprise.
This is A Little Something, a small independent bakery in West Hartford’s Park Street. Owner Beth Bolton says the power was out here for five days.
“I think it probably came at the worst time for me – the absolute worst time.”
That’s because of the sheer amount of food she had on the premises.
“We are at the time of year that we are preparing for Thanksgiving and preparing for the rest of the holiday season. So we try to get the basics like the cookies and the scones – get those all done and in the freezer and out of the way, so those things we can pop out put in the oven and move along.”
With no freezer or refrigeration, all of it had to be thrown away. Between that and orders she couldn’t fill last week, Bolton says she lost $10,000 as a result of the power outage. She painstakingly itemized all of her losses for her insurance company.
“All the insurance man said to me was ‘I’m sorry for the bad news.’”
She is covered for none of her losses, and she won’t see a penny from insurance. That’s because her policy stipulates that she’s only covered for a business interruption due to a power outage if a wire physically connected to her building is damaged. If the outage is due to a general town-wide problem, she’s out of luck.
“I would have never thought about that, never.”
But in fact it’s a common provision, and many businesses in Connecticut who suffered no direct damage will find themselves in the same boat. Chris Hackett is with the Property Casualty Insurers Association of America.
“There may be some insurers out there who offer that as an optional coverage. But if a power interruption occurs away from the insured premises, that would typically not be covered.”
The Connecticut Insurance Department has been helping businesses in the wake of the outage, but this isn’t a situation where they can intervene. Gerard O’Sullivan says for those that did suffer significant uninsured losses, it may prove to be a hard lesson.
“Unfortunately now is not the time to look at your policy and figure out what you have – it’s before these incidents occur.”
Buying optional coverage for a power outage can be expensive, and O’Sullivan it doesn’t actually make sense for every business.
“A lot of people say after the fact – oh I wish I had this – but you have to look at what the cost is and what the risk/reward is. And that’s what insurance is all about. What you’re comfortable with risking and what you want to have covered.”
Back at A Little Something in West Hartford, Beth Bolton says the financial loss to her two-year-old business is severe.
“How do I get back any of that that I lost if insurance is not going to help me? How do I pay my employees? What do I say to them – please stick with me, you know, I can’t pay you but please stick with me?”
She believes for many businesses in Connecticut this constitutes an exceptional circumstance, and she’d like to see the state liaise with insurers on the issue.
“Because of the widespread power outage that we have had in this state and the length that it has, I don’t think any small business should be faulted because of it. All small businesses are going to need help now.”
But as Bolton struggles to reestablish her business she says her local clientele is coming back to support her.
“Could I close the door? Yeah. I could close the door and say that’s it. Am I? No. I’m not a quitter, I’m a fighter.”
For WNPR, I'm Harriet Jones.
