Restaurants Request Government-Backed Insurance Among Other Things
Dan Levenson November 06, 2020
The restaurant industry anticipates a loss of $275 billion dollars, and 7 million jobs due to the Covid-19 pandemic. Consequently, the National Restaurant Association requested relief on behalf of restaurants and their employees, noting that many restaurants may not resume service if the federal government does not take immediate action.
The association gave recommendations to President Trump and congressional leaders offering solutions on how the industry can be aided to weather the Covid-19 storm, including:
A standout among the many ideas given by the National Restaurant Association was the $100 billion federal-backed business interruption insurance plan. The plan is meant to help sustain the restaurant business and employees.
According to NRA, most restaurants have the business interruption insurance, but the insurers may fail to compensate businesses because the policies typically exclude losses due to a pandemic or virus. Insurance carriers have objected to such proposals citing the astronomical cost and resulting impact on premiums.
Under the proposal, the federal government, not private insurance carriers would be tasked with creating a framework for restaurants to obtain insurance relief funds.
Federal Loan Program
Another proposal was the establishment of a federal loan program. According to the association, a federal loan program would help restaurants manage the expenses of their business during the pandemic.
The association recommended that affordable federal and conventional loans to be made available to the tune of $45 billion. In addition to that, the NRA requested $130 million for disaster unemployment assistance. The funds are meant to help the restaurants recover lost revenue, make payments on existing debt, pay employees, and keep operations running.
Targeted Relief Funds
The association requested for $145 billion from the Department of Treasury to immediately make up for the massive drop in revenue over the past several months.
In addition, they asked for $35 billion to help communities in particularly hard-hit areas that are unlikely to fully recover. The association also sought help to allow businesses to defer their mortgage, lease, and loan terms.
The NRA also proposed measures enabling the deferral, delay, and forgiveness of tax obligations.
Tax credits for retaining employees, payroll tax cuts and refund expediting were proposed to help support cash-strapped restaurants.
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