Insurance shortfalls, financial losses crippling St Bess business recovery

WESTERN BUREAU:

Crippling financial losses, inadequate insurance coverage and mounting borrowing costs are threatening the survival of several businesses across St Elizabeth, leaving some operators contemplating permanent closure as they continue to reel from Hurricane Melissa’s devastating 2025 blow.

Kadian Myers-Brown, president of the Black River chapter of the St Elizabeth Chamber of Commerce, and businessman Jason Henzell, chairman of the South Coast chapter of the Jamaica Hotel and Tourist Association, believe that financial pressure continues to undermine recovery efforts.

Myers-Brown said several long-standing, family-operated businesses in Black River remain shuttered because of the inability to finance repairs or replace equipment and stock destroyed during the hurricane, which struck as a Category 5 system just over a year ago.

“Some persons are saying, ‘Hey, I’m just gonna give up.’ Some persons are saying that they are not going to reinvest ... not knowing what the plans truly are from the Government,” she told The Gleaner.

Myers-Brown, an attorney-at-law, said some establishments had operated for generations without adequate financial reserves or insurance protection, leaving their owners particularly vulnerable to the hurricane’s devastating impact.

“Some of them were like mom-and-pop stores operating for almost a century,” she said.

A survey commissioned by the St Elizabeth Homecoming Foundation revealed that 46 per cent of Black River businesses suffered devastating or total destruction, with average rebuilding costs estimated at $17 million. Only 1.4 per cent had insurance coverage.

It also found that 28 per cent of businesses reported income losses ranging from 70 to 100 per cent, with full recovery projected to take approximately 26 months.

Among the establishments yet to recover are the popular Sunrise Bakery, several furniture stores, variety shops, barbershops, and farm supply businesses.

Myers-Brown said supermarkets, pharmacies, hardware stores and medical offices were among businesses that had reopened, largely through the determination of their operators.

Meanwhile, Henzell, who is also CEO of Jakes Hotel and chairman of the Treasure Beach Foundation, said tourism operators were receiving insurance settlements much lower than anticipated, creating additional financial difficulties.

“If I were to take a survey of what people have told me in terms of the settlement that they got, it was probably two-thirds of what they were expecting. You know, it’s probably 65 per cent of what they were hoping for,” he said.

Henzell further explained that lengthy delays in processing claims had forced some operators to borrow money.

“If you have to go and borrow money now, because of the delay, remember you have to add that interest cost,” he said.

He warned that dissatisfaction with insurance settlements was prompting some business owners without outstanding bank loans to reconsider renewing their policies, potentially leaving them exposed to future disasters.

Henzell also stressed the importance of understanding insurance conditions, deductibles and underinsurance, suggesting educational workshops to help tourism operators make better financial decisions.

“You could have the best hotel operationally, but you had the wrong mix of insurance,” he said, in highlighting the need for sound financial decisions.

However, despite the setbacks, Henzell said all accommodation properties in Treasure Beach have reopened, noting that the recent Food, Rum and Reggae Festival generated strong occupancy across southwest St Elizabeth, extending into Junction.

However, Myers-Brown said uncertainty surrounding the Government’s proposed Black River urban centre continued to discourage reinvestment, particularly among coastal operators, who are worried about what protection will be put in place to combat future hurricanes and storm surges.

“It would not make sense to regain or restore business as per usual, not knowing what the effects of another storm will be like,” she said. “People are suffering. Businesses are suffering. Businesses want to really regain some sort of restoration at their peak level.”

albert.ferguson@gleanerjm.com