Our country has seen a significant economic impact at the hands of COVID-19. It has greatly affected businesses and their employees. In addition to the previously implemented CARES Act, state governments are also taking steps to attempt to pump life into their respective economies.
Louisiana is currently proposing legislation that would require insurance coverage for the business interruption caused by COVID-19. Other states, including New Jersey, Massachusetts, Ohio, and New York are also considering similar legislation.
On March 31, 2020 Senate Bill 477 and House Bill 858 were introduced. Both Bills would call for every policy of insurance that insured against loss or damage to property, which included the loss of use, loss of occupancy, or business interruption to include coverage for business interruption due to COVID-19. Both Bills would also call for insurance companies doing business in the state to apply these provisions retroactively to March 11, 2020 to cover business interruption claims due to the pandemic.
The coverage proposed by Bill 477 would indemnify the insured subject to the policy limits for any loss of business or business interruption for the duration of the declared state of emergency. Bill 477 also does not limit coverage to business having a certain number of employees, which differs from Bill 858, which only proposes to offer coverage to those businesses with less than 100 employees.
Additionally, Bill 477 would also require every policy of insurance which covered business interruption delivered or issued on or after August 1, 2020, to include a notice of all policy exclusions, with the form needing to be executed by the insured. The notice would create a rebuttable presumption that the insured knowingly contracted for coverage with the stated exclusions, and the executed form shall be presumed to become a part of the policy of the insurance contract when it is issued and delivered regardless of whether it is physically attached.
We will continue to monitor the situation and provide updates as they become available.
If you have a business interruption insurance policy, please give us a call to see how we may be able to help with your claim.