A downtown Richmond restaurant owner who lost thousands of dollars during a five-day clean water outage has had her denied insurance claim reversed, though she says the city's relief measures fall short for small businesses.
Virginia Sowers, co-owner of Wishbone Food Shop, said the outage cost the restaurant between $4,000 and $6,000 each day. "We are small and it's just the two of us. That is a huge sum of money," she said.
Sowers filed a claim for lost income and spoiled food through Hammond Insurance Services, which submitted it to one of its carrier agencies. An adjuster there told her the loss would not be covered. The adjuster pointed to a CBS 6 report that attributed the outage to fallen branches on a power line, which cut power to the water plant.
Later findings complicated that account. Investigations have revealed that backup power sources that should have worked failed, and a federal audit found numerous problems at the plant in earlier years. The city's Department of Public Utilities Director resigned about a week after the outage. "If it wasn't DPU's fault, if it wasn't the water plant's fault, then you know, why is girl gone?" Sowers asked. She described her reaction to the denial plainly: "Oh, I was livid."
Her insurance agent, Dain Hammond, called the last few days a "nightmare" for the roughly 200 clients of his agency who are filing claims, including Wishbone Food Shop. "If it was 24 hours, no big deal. 48 hours, it's getting tough. You get to three to four days without income, it's a problem," he said.
Hammond said Sowers' claim appeared to be the only one he knew of that had been denied. He said about eight carriers are represented in Richmond, and seven of them were paying out, leaving one carrier he needed to fight. Just hours after speaking with CBS 6, he said he had won her appeal and that a check would be delivered to the restaurant on Friday morning.
The work has been personal for Hammond. He said both of his daughters work in the Richmond restaurant industry and have asked him whether they will be paid. "This is my job, is to make sure everybody's fairly compensated," he said.
An interim city spokesperson said Richmond is filing with the U.S. Small Business Administration for economic injury disaster loans for small businesses. The city is also applying to the Federal Emergency Management Agency to recover money it spent on the emergency response. In addition, it created a pot of funding for small businesses starting at $25,000 and granted a 10-day extension on bill payments owed to the city.
Sowers said she doubts that will be enough. "10 days is nothing what we've lost, especially if we're counting on insurance companies to be there," she said. She described the restaurant as "an ode to the city," noting she was born and raised in Richmond, and said business owners feel "left hanging."
Hammond encouraged business owners to review their insurance policies to make sure they would be properly covered if a similar disruption happens again.
