My client, a restaurant, suffered physical damage (brick through the window) during last summer's social unrest demonstrations. The restaurant closed for several days to clean up and replace the damage. The claim was turned into the carrier and the carrier paid lost income, but refused to pay for payroll that the restaurant continued to pay employees during the shut down. The policy is ISO based and states that it will pay ACTUAL LOSS of business income you sustain. The carrier is saying that because the restaurant received a PPP loan, the PPP loan is paying for payroll, and the restaurant suffered no loss. We believe the PPP loan (not yet forgiven) has nothing to do with the policy language. Your thoughts?

Georgia Subscriber

The business income coverage form pays for loss of business income (from insured operations), including ordinary payroll, during the period of restoration if such loss of income is due to a covered cause of loss. In this situation, the brick damage was a covered cause of loss; therefore the insured is entitled to recover the loss of business income, including the cost of payroll, during the period of restoration. The coverage form does not take into consideration any other income other than business income when calculating a recoverable business income loss; therefore, the ordinary payroll should be included in the loss calculation.