Pennsylvania has joined New Jersey, New York, Massachusetts, Ohio and Louisiana in introducing legislation which would require insurers to pay claims on business interruption losses attributed to the COVID-19 pandemic. Such legislation could override the ability of insurance carriers to rely on policy exclusions which would normally preclude payment on business interruption claims if enacted into law.
Pennsylvania House Bill 2372 would require insurance carriers providing coverage for “loss or damage to property, which includes the loss of use and occupancy and business interruption” to include “coverage for business interruption due to global virus transmission or pandemic.” Similar to other states’ measures, the bill is limited to businesses with fewer than 100 full-time employees. These requirements would apply to policies in force in the state as of March 6, 2020, which is “the date of the Proclamation of Disaster Emergency concerning the coronavirus pandemic.”
State legislators in Pennsylvania also introduced House Resolution 842, which urges the U.S. Congress to facilitate payment to insurance companies through federal stimulus funds for the reimbursement of costs associated with the payment of claims made on business interruption insurance policies during the COVID-19 pandemic.
To date, none of the measures noted above have been enacted into law. Frost Brown Todd will continue to monitor and update you on these developments, and other insurance-related information associated with the COVID-19 pandemic. For more information or questions relating to this specific article, or on other insurance-related issues, please contact Greg Mitchell, Nikki Parrott or anyone in Frost Brown Todd’s Insurance Regulation Practice Group.