Welcome to Axis ProRata, where we take just 10 minutes to get you smarter on the

collision of tech, business, and politics. I'm Dan Permac. On today's show, the Supreme Court

takes up robocalls and the next big question for small business bailouts. The first, is it legal?

That's the question that lots of restaurant owners are asking right now, as their insurance

claims are being unilaterally rejected. Specifically, we are talking here about interruption of

business insurance, which almost every restaurant and most other retailers have. Typically, these

policies were meant to cover losses in the case of something like a problem with the building.

Maybe a tree fell through

the roof or there was a lengthy utility outage. But as you might imagine, right now the issue is

COVID-19 and in particular state authorities not allowing businesses to open their doors. Why it matters

is that restaurants are experiencing the very interruption of business that they've been paying to insure

against. But at the same time, were insurers to pay out such claims, it could very well

bankrupt them, which would create a whole new set of second and third effect problems, including

for the restaurants who would still need them if they can reopen. In Massachusetts, for example,

insurers appear to be relying on a small clause that the industry

got past state regulators in 2006, which explicitly excludes payouts for losses due to virus or bacteria.

Now, the goal was to avoid bailing out a restaurant that didn't take safety and sanitation seriously

enough. But now the insurers have applied it to the broader viral pandemic,

even if there haven't been any actual coronavirus infections in the specific restaurants.

Now, all of which brings us back to the question of legality and in specific,

Legals, as in legal seafoods, a Massachusetts-based restaurant chain with 33 locations in five

states plus the District of Columbia.

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