Just as the coronavirus is deadly for the immune suppressed, the coronavirus quarantine will attack industries that have proven to be susceptible to disruption, potentially changing global society in irreversible ways once consumers adjust to new ideas of living.
The length of the virus’ impact on businesses’ ability to open could cause long-term effects to these businesses. At the beginning of quarantine people were thinking that they would be managing, raising, and educating kids with working remotely for a short delay of just a few weeks. But a mandatory work-from-home policy that lasts months could drive businesses to make consumer-friendly alterations that customers will demand to continue when life returns to “normal.”
Many industries that depend on people leaving their homes are most at risk. These businesses already face competition from alternative ways of shopping. The following are just a couple examples beyond what we’ve previously covered.
Theaters have struggled to maintain business over the last decade due to increased ticket prices and competitors such as Amazon Prime, Netflix, and Hulu. The months to come will test media companies for their ability to change. Between Netflix introducing original movies, and then theaters having to close for months, some operators may go out of business or file for bankruptcy. It is hard to believe theater attendance is going to come back to how it was.
Peloton has earned itself a $6 billion enterprise value by taking on gyms with internet connected home fitness classes on its bikes and treadmills. Recent large investments on home gym equipment could have long-lasting negative effects for the gyms if clients choose to stay at home. It is possible that gyms could see a bounce back if social distancing makes one crave social contact and working out with others.
A surprising 40% of businesses fail to re-open following disaster due to lack of or miscalculated business interruption insurance. Be prepared for your insurance claim to be denied and look for relief from other sources if you have not already. In addition to consulting an attorney experienced in Business Interruption Insurance cases, here are some other good steps for business owners to consider:
1. Check your insurance policy’s notice provision, specifically the timing of when you need to notify your insurer of losses and what it should include.
2. Track losses and additional expenses. Keep a record of expenses by amount and type, periods of complete and partial shutdown, and costs of things such as extra cleaning, delivery, PPE and more.
3. Make a record of any confirmed cases of coronavirus on your premises.