Businesses, Insurers Tangle Over Boston Marathon Loss Payouts

Some businesses that reported financial losses as a result of the Boston Marathon explosions are still wrangling with their insurance companies over compensation or have had claims denied outright as the anniversary of the bombings approaches.

The state’s largest property and casualty insurers have paid a total of $1.9 million in bombing-related claims, according to the state Division of Insurance.

Insurers have rejected nearly half of 133 bombing-related claims that specifically cited losses from business interruption, according to The Boston Globe, citing state figures. Insurers rejected payment for 11 of 27 claims for commercial property damage.

The denials have angered some business owners, who say they collectively lost millions as their businesses were closed for days after the April 15 explosions that killed three people.

Insurance industry officials say there are valid reasons for rejecting claims.

Declan Mehigan, co-owner of the Globe Bar & Cafe and Lir bars on Boylston Street, is still negotiating with his insurance company to recover lost income. The Globe bar, which closed for nine days, filed a claim for $36,000 in lost income but received less than $20,000 six months later, he said.

For Lir, Mehigan said, his insurer offered $26,000 to settle a claim for $46,000 in losses.

“We’re still negotiating with the insurance company to get the best deal possible,” he said.

Frank O’Brien, a spokesman for the Property Casualty Insurers Association of America, said it’s understandable that some businesses would be frustrated, but that claims like those following the bombings are complicated.

Some policies exclude coverage for losses within the first 72 hours of an event, meaning businesses would only be able to claim income lost after that point, he said.

“We as an industry feel we did a good job responding, as we respond to other catastrophes,” O’Brien said. “We’re a contract-based business. We collect a premium based on the risk we signed up to cover, and it’s not a good business practice for us to begin to re-write the contract post-event.”