CHARLOTTE, N.C. — At Emerson Joseph men’s hair salon in uptown, the chairs sit empty.

“If this stretches on for six to 18 months,” said owner Zachary Edwards, “there’s going to be a lot of small businesses in Charlotte that fail.”

Edwards made the call to cut business over the weekend even though he has not been ordered to do so. In the past two weeks, he says he has lost 80 percent of his business.  

“I personally have felt morally obligated to shut down,” he said. “But we have payroll to make and we have a big payroll. Our expenses are pretty high and none of that goes away just because we shut down.”

Edwards bought the salon in 2011. He pays health insurance for his 20 employees. Without money coming in, he says he would be forced to close for good after six months. Many of his employees wanted to keep working – worried how they will pay rent and if they will have a job when this is over, he said.

“They were scared about being able to pay their own bills,” said Edwards. “Just like I’m scared about paying my own personal bills.”

Federal Loans

To help, he’s applying for a Small Business Administration disaster loan. The process, he says, has not been easy.

“This I worked on for almost five hours the other day and I’m still not finished with it,” he said in a video call. “There’s just a lot going into it. It feels like a lot of hurdles to get a loan.”

The SBA site appeared to be overwhelmed at times on Monday. FOX 46 tried several times to open a page on the site that directs users to needed coronavirus information, however, it wouldn’t load. Edwards’ insurance policy, which he says he pays “thousands of dollars” a month on, includes “business interruption insurance.” Edwards says he was told his shop’s closure, due to COVID-19, doesn’t count and would be treated as a “snow day” by his insurer.

“I was disappointed but I wasn’t surprised,” said Edwards, who questions what his “business interruption” insurance is paying for.  

He wants the federal government to step in and back insurance claims for the coronavirus. He says he is already reaching out to lawmakers.

Insurance Denials

Business interruption insurance covers losses when businesses have to shut down unexpectedly due to things like fires, floods and hurricanes. As business owners are now finding out, losses as a result of a virus are often excluded.

Charlotte business attorney Steven Meckler says business interruption insurance disputes are “going to be a big deal.”

“This pandemic is something wholly different because it’s shutting down entire states,” said Meckler with the law firm Schumaker, Loop & Kendrick. “So, that’s where the language and specifics of each individual policy is going to be very important to these companies.”

He said it’s important for companies to go through their contracts, now, thoroughly. He says he will need to use “creative lawyering” to fight for his small business owner clients whose claims are being denied.

“There may be some argument that some other portion of that policy would cover it,” he said. “Like the ‘stay in place shelter.’ So, now your business is not really being affected by a virus. Your business is being impacted by a government order, or decree.”

North Carolina Dept. of Insurance

FOX 46 reached out to the North Carolina Department of Insurance to see what, if anything, can be done to help business owners like Edwards. We were sent the following statement:

“With the recent pandemic of the coronavirus, some business owners may be wondering whether their insurance policies cover losses resulting from a business shut down or other losses related to the coronavirus,” said spokesperson Marla Sink.

“Under the business income policy, there likely is no coverage as losses occurring as a result of a virus or bacteria are typically excluded. Business owners with questions about their coverage should contact their agent/broke or insurer directly and consider whether it is in their own best interest to file a claim. Please note that the North Carolina Department of Insurance does not have the authority to require insurers to extend coverage under the policy where specifically excluded or to sell this type of coverage to consumers.”

You can file an SBA loan here.