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Insurance companies aren’t paying restaurants what’s in their coverage

(BUSINESS NEWS) In shocking consistency with pernicious moral corruption, insurance companies are refusing to pay restaurants for coronavirus disaster claims.

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Restaurants are moving to sue insurers or pressure their local legislatures to get their insurance companies to payout on business interruption caused by the coronavirus. Many insurers are refusing to pay clients thanks to convenient exception clauses for viral outbreaks that were instituted after the SARS outbreak in 2003.

Some insurance companies that lack the exception are still refusing to pay out clients claiming that government-mandated absence of customers does not amount to physical damage to the restaurant property.

Restaurants across the country were forced to either close their doors entirely or adapt their service to to-go only as stay-at-home orders forced closure of dine-in service to prevent the spread of the novel coronavirus starting in March.

Some restaurateurs are looking to state officials to protect their businesses from the blatant negligence of these insurers. U.S. Representative Mike Thompson (D-California) introduced a bill in mid-April to force insurers to pay their clients regardless of any virus exception clauses, as have several other states. Others are looking to litigation to resolve the dispute, although the efficacy of that strategy is grim as the already-sluggish court system is also effectively shut down for the same reasons.

Renowned Chef Thomas Keller – owner of the eponymous restaurant group which includes world-famous Napa Valley restaurant The French Laundry – says his insurance was supposed to cover “civil authority shutdowns” including due to pandemics but insurers have told him and others those instances are not covered. Furthermore, the WHO and CDC statements that the virus may live on surfaces for hours to days constitutes a “dangerous property condition,” which should also be covered by insurance, according to an article Keller wrote for NBC. And yet, the insurer is refusing to pay.

The government-mandated shutdown of dine-in service has highlighted the important role that restaurants play in local economies. Closing restaurants – and not just Michelin-rated ones – not only affects customers’ enjoyment of great food and beverage, but also employment for millions of hourly workers, purveyors, vendors, and farmers, among others.

Make no mistake that it is a moral imperative for both our collective citizenry and our civic leadership to do what it takes to protect the lives of its citizens and minimize the impact of this deadly virus. And yet that task need not be mutually exclusive to protecting the financial security of the service and hospitality sector – one that is core to healthy communities.

According to a CNN Business report The American Property Casualty Insurance Association claims that retroactively rewriting policies “could put the insurance industry at risk.” Insurance companies exist to protect individuals and businesses from unanticipated disasters. If anyone in this economy should be taking a hit for the impact of closures – it should be the insurers, not restaurants and their workers.

Heather Buffo is a Cleveland native, a recovering Bostonian, and an Austin newbie. Heather is the Venture Growth & Partnerships Lead at Republic where she works with partners in private investing to democratize access to capital for entrepreneurs. Heather studied neurobiology at Harvard University, and is a City Year Boston AmeriCorps alum. She likes to write for AG, drink Austin beer, and ride around town on her road bicycle. His name is Pippin. Say hello if you see them.

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Business News

Keep your company’s operations lean by following these proven strategies

(BUSINESS) Keeping your operations lean means more than saving money, it means accomplishing more in less time.

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The past two years have been challenging, not just economically, but also politically and socially as well. While it would be nice to think that things are looking up, in reality, the problems never end. Taking a minimalist approach to your business, AKA keeping it lean, can help you weather the future to be more successful.

Here are some tips to help you trim the fat without putting profits above people.

Automate processes

Artificial intelligence frees up human resources. AI can manage many routine elements of your business, giving your team time to focus on important tasks that can’t be delegated to machines. This challenges your top performers to function at higher levels, which can only benefit your business.

Consider remote working

Whether you rent or own your property, it’s expensive to keep an office open. As we learned in the pandemic, many jobs can be done just as effectively from home as the workplace. Going remote can save you money, even if you help your team outfit their home office for safety and efficiency.

In today’s world, many are opting to completely shutter office doors, but you may be able to save money by using less space or renting out some of your office space.

Review your systems to find the fat

As your business grows (or downsizes), your systems need to change to fit how you work. Are there places where you can save money? If you’re ordering more, you may be able to ask vendors for discounts. Look for ways to bring down costs.

Talk to your team about where their workflow suffers and find solutions. An annual review through your budget with an eye on saving money can help you find those wasted dollars.

Find the balance

Operating lean doesn’t mean just saving money. It can also mean that you look at your time when deciding to pay for services. The point is to be as efficient as possible with your resources and systems, while maintaining customer service and safety. When you operate in a lean way, it sets your business up for success.

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Business News

How to apply to be on a Board of Directors

(BUSINESS) What do you need to think about and explore if you want to apply for a Board of Directors? Here’s a quick rundown of what, why, and when.

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What?
What does a Board of Directors do? Investopedia explains “A board of directors (B of D) is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors. Some private and nonprofit organizations also have a board of directors.”

Why?
It is time to have a diverse representation of thoughts, values and insights from intelligently minded people that can give you the intel you need to move forward – as they don’t have quite the same vested interests as you.

We have become the nation that works like a machine. Day in and day out we are consumed by our work (and have easy access to it with our smartphones). We do volunteer and participate in extra-curricular activities, but it’s possible that many of us have never understood or considered joining a Board of Directors. There’s a new wave of Gen Xers and Millennials that have plenty of years of life and work experience + insights that this might be the time to resurrect (or invigorate) interest.

Harvard Business Review shared a great article about identifying the FIVE key areas you would want to consider growing your knowledge if you want to join a board:

1. Financial – You need to be able to speak in numbers.
2. Strategic – You want to be able to speak to how to be strategic even if you know the numbers.
3. Relational – This is where communication is key – understanding what you want to share with others and what they are sharing with you. This is very different than being on the Operational side of things.
4. Role – You must be able to be clear and add value in your time allotted – and know where you especially add value from your skills, experiences and strengths.
5. Cultural – You must contribute the feeling that Executives can come forward to seek advice even if things aren’t going well and create that culture of collaboration.

As Charlotte Valeur, a Danish-born former investment banker who has chaired three international companies and now leads the UK’s Institute of Directors, says, “We need to help new participants from under-represented groups to develop the confidence of working on boards and to come to know that” – while boardroom capital does take effort to build – “this is not rocket science.

When?
NOW! The time is now for all of us to get involved in helping to create a brighter future for organizations and businesses that we care about (including if they are our own business – you may want to create a Board of Directors).

The Harvard Business Review gave great explanations of the need to diversify those that have been on the Boards to continue to strive to better represent our population as a whole. Are you ready to take on this challenge? We need you.

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Business News

Average age of successful startup founders is 45, but stop stereotyping

(BUSINESS) Our culture glorifies (yet condemns?) startup founders as rich 20-somethings in hoodies, but some are a totally different type.

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There’s a common misconception that startups are riddled with semi-nerdy, 20-something white dudes who do nothing but sip Nitro Brews and walk around the open office showing off the hoodie they wore yesterday. It turns out that it’s extremely rare that startup offices resemble The Social Network.

However, the academic backdrop for the real social network story (AKA Harvard), produced statistics that will serve to put the aforementioned misconception to rest. According to the Harvard Business Review, the average age of people who founded the highest-growth startups is 45. Say what?! A full-fledged adult?!

In fact, aside from the age category of 60 and over, ages 29 and younger were the smallest group of founders that are responsible for heading the highest-growth startups. I guess you can accomplish a lot when you’re not riding around the office on a scooter all day.

The study also found that older entrepreneurs are more likely to succeed. The probability of extreme startup success rises with age, at least until the late 50s. It was found that work experience plays an important role.

Many will argue, “Well, what about someone like Steve Jobs?” You could easily argue right back that it took Jobs until the age of 52 to create Apple’s most profitable product – the iPhone.

The study continues to answer questions like, why do Venture Capitalist investors bet on young founders? This goes back to the misconception at the start, and there’s a notion that youth is the key for successful entrepreneurship. Wrong.

There is also the idea that younger entrepreneurs are likely working with less financial options, so it may be common for them to take something from a VC at a lower price. As a result, they could be viewed as more of a bargain than older founders.

“The next step for researchers is to explore what exactly explains the advantage of middle-aged founders,” writes Pierre Azoulay, et al. “For example, is it due to greater access to financial resources, deeper social networks, or certain forms of experience? In the meantime, it appears that advancing age is a powerful feature, not a bug, for starting the most successful firms.”

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