Insurance for COVID-19 Related Business Income Losses: Key Legislative and Regulatory Developments Tracker (US): 2020 and 2021 | Practical Law

Insurance for COVID-19 Related Business Income Losses: Key Legislative and Regulatory Developments Tracker (US): 2020 and 2021 | Practical Law

A chart summarizing key legislative and regulatory efforts to protect commercial insureds from the economic impacts of the ongoing 2019 novel coronavirus disease (COVID-19) pandemic in 2020 and 2021, including attempts to guarantee business interruption insurance coverage for COVID-19-related lost business income. The resource includes summaries of developments at the federal level and in select states set out in individual charts for each jurisdiction.

Insurance for COVID-19 Related Business Income Losses: Key Legislative and Regulatory Developments Tracker (US): 2020 and 2021

by Practical Law Commercial Transactions
A chart summarizing key legislative and regulatory efforts to protect commercial insureds from the economic impacts of the ongoing 2019 novel coronavirus disease (COVID-19) pandemic in 2020 and 2021, including attempts to guarantee business interruption insurance coverage for COVID-19-related lost business income. The resource includes summaries of developments at the federal level and in select states set out in individual charts for each jurisdiction.

Efforts to Guarantee the Availability of Business Interruption Insurance Coverage for COVID-19 Related Losses

In an effort to help small businesses recover from the disruptions caused by the 2019 novel coronavirus disease (COVID-19) pandemic, federal and state officials introduced:
This resource tracks proposed federal and state legislative attempts to guarantee business interruption coverage for COVID-19 losses and state regulatory efforts to provide immediate relief to commercial insureds in 2020 and 2021, including:
  • Listing key legislative (if any) and regulatory developments in all relevant jurisdictions.
  • Linking to the text of each development.
  • Providing a summary of the development.
This resource only includes 2020 and 2021 developments. For information on current legislative efforts to provide insurance coverage for pandemic-related losses, see Practice Note, Proposed Legislation to Guarantee Insurance Coverage for Pandemic-Related Business Interruption Losses (US): 2022.
For charts tracking key COVID-19-related:
For additional guidance on the business impacts of COVID-19, see Commercial Global Coronavirus Toolkit.

Business Interruption Insurance for COVID-19 Losses: Key Federal Legislative Developments (2020 and 2021)

In 2020 and 2021, Congress considered five insurance-related bills in response to the COVID-19 pandemic:
  • The Business Interruption Relief Act of 2020.
  • The Business Interruption Insurance Coverage Act of 2020.
  • The Never Again Small Business Protection Act.
  • The Pandemic Risk Insurance Act.
  • H.R. 114 (requiring the Comptroller General to prepare a report on the feasibility of a national all-hazards disaster insurance program)
Only one of these proposed bills, the Business Interruption Insurance Coverage Act, would have required insures to provide coverage for COVID-19 losses under current business interruption policies regardless of terms and conditions that may otherwise preclude coverage (including physical damage requirements and viral exclusions). The Business Interruption Relief Act invites insurers to participate in a voluntary program: if an insurer covers an insured's COVID-19-related business interruption claim, then the federal government will reimburse the insurer.
The Never Again Small Business Protection Act and Pandemic Risk Insurance Act are prospective. They require insurers to offer business interruption policies that cover public health emergencies and other catastrophic events and create federally backed reinsurance programs to protect insurers from excessive losses. 
Date
Legislative Development
November 2, 2021
H.R. 5823  
Title: To establish a Pandemic Risk Reinsurance Program, and for other purposes.
Current Status: Referred to the House Committee on Financial Services
Summary: Representative Carolyn Maloney (D-NY) introduced the second version of the Pandemic Risk Insurance Act (PRIA). She introduced the first version, H.R. 7011, the Pandemic Risk Insurance Act of 2020 (PRIA), on April 3, 2020. The bill:
  • Establishes a pandemic risk insurance program.
  • Requires insurers to offer pandemic risk coverage in key commercial lines of insurance, including business interruption and event cancellation.
For more information, see the April 3, 2020 entry below (summarizing PRIA).
January 4, 2021
H.R. 114 (2021 CONG HR 114)
Title: To require a report by the Comptroller General of the United States on a national all-hazards disaster insurance program.
Current Status: Introduced in the House and Referred to the House Committee on Financial Services.
Summary: Representative Sheila Jackson Lee (D-TX) introduced this bill. It requires the Comptroller General of the United States to submit a report to Congress on:
  • The feasibility and design of a national all-hazards disaster insurance program.
  • The risk of property owners continuing to underinsure or have no insurance on homes and the implications of those actions on the financial stability of the housing market.
  • The challenge of developing actuarial tables to determine premiums and the setting options for premium payments for disaster declaration policies to be collected annually, quarterly, or monthly.
  • The challenges and feasibility of selling policies at the same time a property casualty policy is purchased. 
June 29, 2020
H.R. 7412
Title: Business Interruption Relief Act of 2020
Current Status: Introduced in the House and Referred to the House Committee on Financial Services.
Summary: Representative Mike Thompson (D-CA) introduced this bill. It creates a program that will reimburse insurers who voluntarily pay out COVID-19-related business interruption claims. Eligible insureds must have business interruption insurance that includes civil authority coverage and does not exclude virus-related damages. 
The bill purports to: 
  • Provide economic relief to businesses by helping them get their business interruption claims honored. 
  • Prevent coverage litigation.
April 14, 2020
H. R. 6494 (2019 CONG US HR 6494)
Title: Business Interruption Insurance Coverage Act of 2020
Current Status: Introduced in Congress. 
Summary: Representative Mike Thompson (D-CA) introduced this bill. It requires insurers to construe all in-force property insurance policies that include business interruption coverage to include coverage for business interruption losses due to: 
  • Any viral pandemic.
  • Any forced closure of businesses or mandatory evacuation, by law or order of any government or governmental officer or agency, including the federal government and state and local governments.
  • Any power shut-off conducted for public safety purposes.
Section 3 of the bill addresses preemption. It states that the bill voids:
  • Any exclusions that exclude losses due to viral pandemic, forced closures, and power shut-offs (as defined in the bill).
  • Any state law that approves any exclusion of losses due to viral pandemic, forced closures, and power shut-offs (as defined in the bill). 
The bill does, however, allow insurers to reinstate exclusions if policyholders fail to pay increased premiums for business interruption coverage.
This bill does not have a provision requiring the federal government to reimburse insurers.
April 14, 2020
Title: Never Again Small Business Protection Act
Current Status: Referred to the House Committee on Financial Services
Summary: Representative Brian Fitzpatrick (R-PA) introduced this bill. The bill: 
  • Requires business interruption insurance policies to provide coverage for losses incurred during a national emergency declared by the President. 
  • Becomes effective only after formal certification by the Secretary of the Treasury that a federal backstop is in place to reinsure "excessive losses" under business interruption coverage made available under the bill. 
The bill also requires the Secretary of the Treasury to establish a Federal Advisory Committee on Insurance to conduct a study regarding the federal backstop mechanism, report the results of the study to Congress, and certify that a backstop is in place. Once the Secretary certifies that the backstop is in place, then every insurer that offers business interruption insurance "shall make available" optional additional coverage for losses that:
  • "Result from business interruption due to any order, by any officer or agency of (local, state, or federal government) requiring cessation of operations during a national emergency."
  • "Occur in any area to which such national emergency applies … and covers such losses for a continuous period that begins upon the declaration of the national emergency and is not shorter than 30 days."
April 3, 2020 
Title: H.R. 7011, the Pandemic Risk Insurance Act of 2020 (PRIA)
Current Status: Introduced in the House
Summary: Representative Carolyn Maloney (D-NY) introduced the bill on May 26, 2020. A draft version of the bill began circulating in early April when House Financial Services Committee Chair Maxine Waters' (D-CA) made it a component of a legislative package to provide a comprehensive fiscal stimulus and public policy response to COVID-19. Representative Maloney was the lead author of the draft that she introduced on May 26. 
This bill establishes the Federal Pandemic Risk Reinsurance Program to provide for "a transparent system of shared public and private compensation for business interruption losses resulting from a pandemic or outbreak of communicable disease." The draft bill closely resembles the Terrorism Risk Insurance Act (TRIA) (Pub. L. No. 107-297, 116 Stat. 2322 (2002)), which was passed after 9/11 to guarantee that insurers continue to provide affordable coverage for terrorist acts. Like TRIA, PRIA is prospective and does not require insurers to cover COVID-19-related losses that are otherwise excluded from coverage under current insurance policies.
The draft bill tasks the Department of the Treasury with administering a Pandemic Risk Insurance Program. The program is triggered when insurance industry losses exceed $250 million and caps annual losses at $750 billion. Insurer participation is voluntary. Participating insurers:
  • Will be charged an annual premium for reinsurance coverage, "based on the actuarial cost of providing such reinsurance coverage, including costs of administering the program."
  • Must provide business interruption coverage for "covered public health emergencies" (which include outbreaks of infectious ‎diseases or pandemics) with terms, amounts, and other limitations that are not materially different from those that apply to losses that arise from other types of events. 
  • Are subject to individual and industry deductibles, after which insurers then share with the Treasury in losses up to certain thresholds, with the government paying 95%.‎

Business Interruption Insurance for COVID-19: Key State Legislative and Regulatory Developments (2020 and 2021)

State legislatures and insurance departments have also been active the in the effort to provide relief from the economic consequences of COVID-19. Policyholders should monitor legislative and regulatory developments to determine whether the state (or states) where they suffered COVID-19-related business income losses is:

State Legislation Compelling Coverage of COVID-19-Related Business Interruption Claims

Twelve states and the District of Columbia have introduced legislation to compel insurers to provide business interruption coverage for COVID-19 losses under existing insurance policies in 2020 and 2021:
With the exception of California (see California), the proposed laws share certain common features, including that they all:
  • Aim to broaden business interruption coverage under existing insurance policies to require coverage for COVID-19-related business interruption losses regardless of the policy's terms and conditions.
  • Apply retroactively, including by mandating that the legislation applies:
    • retroactively to a specific date (for example, the date of a governor's emergency declaration); and
    • to policies in effect as of a date certain or the date the legislation is enacted.
  • Change policies' physical damage requirement, including by:
    • redefining "property damage" to include the presence of a person infected with COVID-19 on the policyholder's premises, in the same municipality as the policyholder, or in the same state as the policy holder;
    • prohibiting insurers from denying a COVID-19-related business interruption claim on the basis that there was no physical damage to property or on the basis that an exclusion applies; and
    • requiring insurers to cover COVID-19 damages, regardless of policy language (including physical damage requirements).
  • Apply only to small businesses; for example:
    • the most restrictive bills apply to insureds with fewer than 100 full-time employees; and
    • the most expansive applies to insureds with fewer than 250 employees.
  • Include funding provisions that allow insurers to apply to the state for reimbursement from a fund which is financed by assessments against insurers.

State Regulations Providing Economic Relief to Commercial Insureds Suffering COVID-19-Related Losses

State insurance departments were also active in the effort to provide economic relief to businesses suffering the economic consequence of COVID-19. Unlike legislative proposals to mandate coverage for COVID-19 business income losses, state insurance department regulations do not change the law regarding how insurers must interpret business interruption policies. Instead, the regulations instruct insurers to provide some relief to their insureds during the COVID-19 pandemic; for example, by:
  • Relaxing deadlines for insureds to perform certain acts, including the submission of claims or proofs of loss.
  • Granting grace periods for payment of insurance premiums.
  • Withdrawing notices of cancellation and nonrenewal.
  • Postponing issuance of any new notices of cancellation or nonrenewal.
These regulations are effective immediately but are of limited duration.

State Charts of Key Legislative and Regulatory Developments

California

Legislative Developments

Date
Legislative Development
June 29, 2020
California Assembly Bill No. 1552
Title: Commercial Insurance: Business Interruption: Coverage for COVID-19
Current Status: Re-referred to the Committee on Insurance
Summary: This bill modifies the burden of proof for business interruption claims filed during California's COVID-19 state of emergency, making it easier for insureds to overcome the direct physical loss or damage requirement that is part of most policies.
Specifically, the bill creates the following rebuttable presumptions:
  • COVID-19 was present on the insured's property and caused physical damage to that property which was the direct cause of the business interruption.
  • COVID-19 was present on property located within the geographical area covered by a COVID-19-related order of civil authority and caused physical damage to that property which was the direct cause of the insured's business interruption. 
This bill:
  • Does not affect the applicability of any express policy exclusion for viruses.
  • States that COVID-19 "shall not be" considered a "pollutant or contaminant" for any policy exclusion unless the definition of either term expressly includes viruses.
If passed, this legislation will apply retroactively to commercial insurance policies that include business interruption coverage which were in effect on or after March 4, 2020.

Regulatory Developments

Date
Regulatory Development
May 15, 2020 - Expired
Notice: Extended Grace Period for Insurance Premium Payments Due to the Disruption Caused by the COVID-19 Pandemic
Issuer: California Department of Insurance 
Directed to: All admitted and non-admitted insurance companies, all licensed producers, and other interested parties
Summary: This notice requests that insurers extend the 60 day grace period provided in the Notice dated March 18, 2020 for an additional 60 days. Specifically:
  • Insurers should not cancel or non-renew any policy for failure to pay premiums until at least July 14, 2020. 
  • Any insurer that chooses to extend the grace period for more than 60 days must do so in a nondiscriminatory manner.
  • On or after July 14, 2020, insurers should provide policyholders with at least 10 days written notice of cancellation given in accordance with policy requirements.
  • Insurers are encouraged to work with individual policyholders that have failed to pay timely premiums because they have been acutely impacted by COVID-19. 
  • Advises policyholders that a policy can be cancelled or non-renewed during the extended grace period for an allowable reason other than the failure to pay premiums.
April 14, 2020
Notice: Requirement to Accept, Forward, Acknowledge, and Fairly Investigate All Business Interruption Insurance Claims Caused by the COVID-19 Pandemic
Issuer: California Department of Insurance 
Recipient: All admitted and non-admitted insurance companies, all licensed insurance adjusters and producers, and other licensees and interested parties
Summary: The insurance commissioner issued this notice after receiving numerous complaints that certain insurers, agents, brokers, and insurance company representatives are attempting to dissuade policyholders from filing business interruption claims and refusing to open and investigate claims they do receive. 
In response, the notice reminds insurers that they must accept, forward, acknowledge, and fairly investigate claims related to COVID-19 losses in accordance with their contractual, statutory, and regulatory obligations, including the following obligations set out in the California Fair Claims Settlement Practices Regulations:
  • On receipt of a claim:
    • acknowledge the claim in writing within 15 days;
    • specify the information the policyholder must provide in connection with proof of claim; and
    • begin any necessary investigation of the claim.
  • Conduct and diligently pursue a thorough, fair, and objective investigation of the claim.
  • After conducting a thorough, fair, and objective investigation of the claim:
    • accept or deny the claim in whole or in part no more than 40 days after receipt of the proof of claim; and
    • if the claim is denied in whole or in part, communicate the denial in writing to the policyholder listing all the legal and factual bases for the denial. 
    (Cal. Code Regs. tit.10; §§ 2695.1 et seq.) 
April 3, 2020
Notice: Extension of Policyholder Deadlines that Impact Claims or Coverage Due to COVID-19 
Issuer: California Department of Insurance 
Directed to: All admitted and non-admitted insurance companies, all licensed insurance adjusters and producers, and other licensees and interested parties
Summary: This notice orders insurers not to enforce policy or statutory deadlines on policyholders until 90 days after the end of the statewide COVID-19 state of emergency or any other COVID-19-related emergency order that impacts a specific policyholder. This includes, but is not limited to: 
  • Deadlines for the submission of a sworn proof of loss. 
  • Other claim forms. 
  • Examinations under oath. 
  • Medical examinations. 
  • Physical inspections of insured property. 
  • Separating damaged property from undamaged property. 
  • Temporary repairs to prevent further damage.
  • Any other policy, statutory, or insurer-imposed deadlines placed on the policyholder where failure to comply could result in the forfeiture, limitation, or waiver of any policyholder(s) rights to benefits under any policy of insurance. 
March 18, 2020 - Expired
Notice: 60-Day Grace Period for Insurance Premium Payments Due to COVID-19 
Issuer: California Department of Insurance
Directed to: All admitted and non-admitted insurance companies, all licensed insurance adjusters and producers, and other licensees and interested parties
Summary: This notice orders insurance companies to provide their policyholders with at least a 60-day grace period to pay their premiums so that insurance policies are not cancelled for nonpayment due to the disruptions caused by COVID-19.
Undated
FAQ on Business Interruption Insurance and Other Issues Affecting California Small Businesses published by the California Department of Insurance 
Issuer: California Department of Insurance
Directed to: General public
Summary: The FAQ provides general guidance to businesses regarding the availability of insurance coverage, including business interruption insurance coverage, for COVID-19-related business losses. The FAQ guidance provides the insurance department's opinion regarding coverage under a "typical" business interruption policy. It does not supersede specific policy language, applicable federal or state statutes, or common law principles of contract interpretation. 
The FAQ states:
  • Most commercial policies have exclusions for loss due to contamination by virus and similar perils, such as pandemics.
  • Insureds should check their policies for either:
    • a specific exclusion for viral/bacterial contamination or an incident triggered by an epidemic/pandemic, which means insurance likely does not cover losses related to COVID-19; or
    • a special endorsement for virus and pandemic, which means insurance likely covers COVID-19-related losses (although few, if any, policies have these).
  • A government ordered shutdown due to a pandemic may likely not be fully sufficient to trigger business interruption insurance coverage in the absence of physical damage to the insured property caused by a covered peril.

District of Columbia

Legislative Developments

Date
Legislative Development
October 20, 2020
Title: Commercial Insurance Claim Tolling Temporary Act of 2020 (D.C. Law 23-143)
Current Status: Became effective on October 20, 2020 and expires June 2, 2021
Summary: Extends by 225 the tolling of deadlines under commercial insurance policies as stated in the three-bill emergency legislative package described in the July 7, 2020 and July 27, 2020 entries below).  
July 27, 2020
Title: Commercial Insurance Physical Loss of Property Claim Tolling Emergency Act of 2020 
Current Status: Signed by the Mayor and Enacted with Act Number A23-343, Expires on October 24, 2020.
Summary: This bill is part of a three-bill emergency legislative package that includes: 
Together, the bills: 
  • Toll all commercial insurance policy deadlines as they relate to claims or appeals of decisions related to physical loss of property and business interruption losses for the length of the Mayor's COVID-19 public health emergency (first announced on March 11, 2020) plus 90 days, including claims for: 
    • loss of use of property;
    • loss of occupancy;
    • property damage;
    • lost income; 
    • incurred expenses; and
    • other business interruption losses.
  • Ensure that arbitrary deadlines do not prohibit the District’s struggling businesses from filing or appealing claims for losses due to business interruption. 
The bills apply to commercial insurance policies in force as of March 25, 2020 that include coverage for losses in the District of Columbia. They do not expand coverage under business interruption policies or otherwise affect whether a policyholder qualifies for coverage under any given policy.
July 7, 2020
Title: Commercial Insurance Physical Loss of Property Claim Tolling Temporary Act of 2020
Current Status: Introduced and retained by the Council of the District of Columbia 
Summary: This bill is part of a three-bill emergency legislative package that also includes:
Together, the bills: 
  • Toll all commercial insurance policy deadlines as they relate to claims or appeals of decisions related to physical loss of property and business interruption losses for the length of the Mayor's COVID-19 public emergency (first announced on March 11, 2020) plus 90 days, including claims for: 
    • loss of use of property;
    • loss of occupancy;
    • property damage;
    • lost income; 
    • incurred expenses; and
    • other business interruption losses.
  • Ensure that arbitrary deadlines do not prohibit the District’s struggling businesses from filing or appealing claims for losses due to business interruption. 
The bills apply to commercial insurance policies in force as of March 25, 2020 that include coverage for losses in the District of Columbia. They do not expand coverage under business interruption policies or otherwise affect whether a policyholder qualifies for coverage under any given policy.
July 7, 2020
Title: Commercial Insurance Physical Loss of Property Claim Tolling Emergency Declaration Resolution of 2020
Current Status: Introduced and retained by the Council of the District of Columbia 
Summary: This bill is part of a three-bill emergency legislative package that also includes:
Together, the bills: 
  • Toll all commercial insurance policy deadlines as they relate to claims or appeals of decisions related to physical loss of property and business interruption losses for the length of the Mayor's COVID-19 public emergency (first announced on March 11, 2020) plus 90 days, including claims for: 
    • loss of use of property;
    • loss of occupancy;
    • property damage;
    • lost income; 
    • incurred expenses; and
    • other business interruption losses.
  • Ensure that arbitrary deadlines do not prohibit the District’s struggling businesses from filing or appealing claims for losses due to business interruption. 
The bills apply to commercial insurance policies in force as of March 25, 2020 that include coverage for losses in the District of Columbia. They do not expand coverage under business interruption policies or otherwise affect whether a policyholder qualifies for coverage under any given policy.
May 5, 2020
Title: Coronavirus Omnibus Emergency Amendment Act of 2020, Section 2
Current Status: Considered by the Council of the District of Columbia
Summary: The bill requires insurers to construe every insurance policy that includes business interruption coverage to provide coverage for business interruption losses resulting from the declaration of a public health emergency, including COVID-19 emergency declarations. 
Specifically, the bill states that no insurer can deny a business interruption claim due to:
  • "Losses arising from actions an insured takes in response to an order issued during a public health emergency, even if the relevant insurance policy excludes losses resulting from viruses."
  • "There being no physical damage to the property of the insured or to any other relevant property."
The bill applies to insurance policies:
  • In force as of the effective date of the Act.
  • Issued to insured with fewer than 100 full-time employees.
The bill also allows insurers to apply to the Commissioner of the District of Columbia Department of Insurance, Securities, and Banking for reimbursement from funds "collected and made available for this purpose."

Regulatory Developments

Date
Regulatory Development
February 5, 2021
Notice: Guidance on Commissioner's Orders and Bulletins Providing Relief to Policyholders During Public Health Emergency
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: All insurers and premium finance companies licensed and operating in the District of Columbia
Summary: This notice requires all insurers and premium finance companies to continue to comply with previous bulletins and orders issued by the Commissioner of Insurance directing them to modify or refrain from certain activities and business practices to protect insureds during the COVID-19 Public Health Emergency (which has been extended through March 17, 2021 by Mayor's Order 2021-004, which modified Mayor's Order 2020-127).
October 20, 2020
Notice: Guidance on Commissioner's Orders and Bulletins Providing Relief to Policyholders During Public Health Emergency
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: All insurers and premium finance companies licensed and operating in the District of Columbia
Summary: This notice requires all insurers and premium finance companies to continue to comply with previous bulletins and orders issued by the Commissioner of Insurance, directing them to modify or refrain from certain activities and business practices to protect insureds during the Public Health Emergency (which has been extended by Mayor's Order 2020-103 through December 31, 2020).
August 17, 2020
Notice: Guidance on Commissioner's Orders and Bulletins Providing Relief to Policyholders During Public Health Emergency
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: All insurers and premium finance companies licensed and operating in the District of Columbia
Summary: This notice requires all insurers and premium finance companies to comply with previous bulletins and orders issued by the Commissioner of Insurance directing them to modify or refrain from certain activities and business practices to protect insureds during the Public Health Emergency through October 9, 2020. 
May 18, 2020
Bulletin 20-IB-2-5/08: Guidance on Commissioner's Order 03-2020
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: All premium finance companies licensed in the District of Columbia
Summary: This bulletin clarifies Commissioners Order 03-2020. Specifically, it states:
  • The "accommodations" that insurers must provide pursuant to Order 03-2020 remain effective for the duration of Public Health Emergency declared by the mayor.
  • Order 03-2020 applies to insurance premium finance agreements in effect on or before March 11, 2020.
April 27, 2020
Commissioners Order 03-2020: Order Providing Relief To Policyholders 
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: All insurance companies authorized to conduct business in the District of Columbia
Summary: This order provides relief to affected policyholders by prohibiting insurers from terminating policies due to nonpayment. Insurers must:
  • Allow policyholders to repay unpaid premiums over a period of at least 12 months that begins one month after the end of the Public Health Emergency declared by the mayor.
  • Waive late fees for unpaid premium payments. 
Insurers must also make reasonable accommodations for policyholders, including:
  • Waiving installment, late payment, or reinstatement fees.
  • Deferring cancellations, non-renewals, and adverse underwriting actions.
  • Extending billing due dates and premium grace periods.
  • Ensuring that late payments during the COVID-19 emergency are not considered when calculating a policyholders' premiums in the future.
  • Making policyholders aware of the accommodations available.
  • Providing ready access for policyholders to apply for these accommodations online, by mail, and by telephone.
  • Providing an option to use electronic payment technology when possible.
March 24, 2020
FAQ: Insurance Issues Related to Coronavirus (COVID-19)
Issuer: The District of Columbia Department of Insurance, Securities, and Banking
Directed to: General public
Summary: This FAQ answers common questions policyholders have regarding various types of insurance relating to COVID-19. The FAQ guidance does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation. 
The FAQ advises that: 
  • There is likely no coverage under typical business interruption policies because losses occurring as a result of a communicable disease are usually excluded. 
  • Business interruption insurance does not provide coverage for a slowdown or a reduction in operations.

Florida

Regulatory Developments

Date
Regulatory Development
March 25, 2020
OIR-20-04M: Informational Memorandum 
Issuer: Florida Office of Insurance Regulation 
Directed to: All insurers and entities regulated by the Florida Office of Insurance Regulation 
Summary: This memorandum provides general guidance on the treatment of policyholders as part of the state's ongoing efforts to protect Floridians from the effects of the COVID-19 pandemic. It encourages regulated entities to be flexible with premium payments to avoid a lapse in coverage, including by:
  • Relaxing due dates.
  • Extending grace and reinstatement periods.
  • Waiving late fees and penalties.
  • Allowing payment plans.
The memorandum also encourages regulated entities to consider cancellation of policies only after exhausting all possible efforts to work with policyholders to continue coverage.

Georgia

Regulatory Developments

Date
Regulatory Development
April 28, 2020
Bulletin 20-EX-7: Winding Down COVID-19 Bulletins and Directives
Issuer: Georgia Office of Insurance and Safety Fire Commissioner
Directed to: Georgia consumers and insurers
Summary: This directive advises both consumers and insurers of changes and modifications to previously issued bulletins and directives related to COVID-19. It states, among other things, that Directive 20-EX-5, which prohibits property and casualty insurers from cancelling any policy that includes business interruption or business income coverage for non-payment, expires on May 19, 2020.
March 20, 2020
Expired
Directive 20-EX-5: New Covid-19 Actions 
Issuer: Georgia Office of Insurance and Safety Fire Commissioner 
Directed to: All licensed insurance companies
Summary: This directive protects consumers and industry during the COVID-19 pandemic by prohibiting property and casualty insurers from cancelling any policy that includes business interruption or business income coverage for non-payment for a minimum of 60 days. 
March 17, 2020
Bulletin 20-EX-3: Business Interruption Insurance and COVID-19
Issuer: Georgia Office of Insurance and Safety Fire Commissioner 
Directed to: Georgia consumers
Summary: This is an informational memorandum regarding the availability of business interruption coverage for COVID-19 related losses. It does not supersede specific policy language, applicable federal or state statutes, or common law principles of contract interpretation. It states:
  • Virus or disease is typically not an insured peril unless added by endorsement.
  • Civil authority coverage typically requires physical damage to nearby or adjacent property.

Illinois

Legislative Developments

Date
Legislative Development
June 12, 2020 
S.B. 2135
Title: Government Emergency Administration, Article 25: Business Interruption Insurance
Current Status: Effective June 12, 2020. 
Summary: Article 25 is an amendment to Illinois Senate Bill 2135 proposes changes to the Illinois Administrative Code (20 ILCS 1405/1405-32). The proposed changes require the Illinois Department of Insurance to appoint a task force on business interruption insurance to study the impacts of COVID-19 on businesses and the need for changes to business interruption insurance policies based on those impacts, including proposed legislation.
The task force shall:
  • Consist of no more than 10 members representing the Department of Insurance and the insurance industry.
  • Include a representative from an Illinois-based national trade association that represents insurers that provide a significant segment of market share of the commercial insurance provided in Illinois.
  • Submit its findings and recommendations to the Governor and the General Assembly by December 31, 2020.
On December 31, 2021, the task force is dissolved and this section of the Illinois Administrative Code is repealed.
Article 25 was proposed on May 21, 2020 and became effective on June 12, 2020.

Regulatory Developments

Date
Regulatory Development
June 8, 2020
Company Bulletin #2020-15: Coverage Related to Business and Property Damage Losses, Including but Not Limited To Those Arising Out of Vandalism and Looting
Issuer: Illinois Department of Insurance
Directed to: All licensed insurance companies that issue or deliver P&C policies
Summary: This bulletin requires P&C insurers to institute certain protective measures for the benefit of policyholders that suffered property damage, including vandalism and looting, due to events that took place in Illinois in early June. Policyholders affected include those located in the counties listed in disaster proclamations issued by the Governor on June 1st and June 3rd (and any subsequent related proclamation). 
Policyholders that suffered business interruption losses due to the COVID-19 pandemic that also have a claim for property damage due to the events discussed in the Governor's disaster proclamations may be entitled to some of the protections provided in this bulletin. Specifically, provisions in the bulletin that may be applicable include:
  • A 60-day moratorium on the cancellation or non-renewal of policies for impacted policyholders. 
  • Requirement that to the extent business interruption provisions are included and operative under a policy, insurers should base payouts on business activity levels that eliminate the impact of COVID-19.
May 5, 2020
Expired
Company Bulletin #2020-12: Extending Previously Issued Suspension of Cancellation, Non-renewal, and Premium Payment
Issuer: Illinois Department of Insurance
Directed to: All licensed insurance companies
Summary: This bulletin requests that insurers extend the safeguards provided in Company Bulletin #2020-09 through May 29, 2020.
April 3, 2020
Expired
Company Bulletin #2020-09: Suspension of Cancellation, Non-renewal, and Premium Payment
Issuer: Illinois Department of Insurance
Directed to: All licensed insurance companies
Summary: This bulletin directs insurers to:
  • Withdraw or postpone any previous notice of cancellation or nonrenewal if the cancelation or nonrenewal occurred on or after March 9, 2020.
  • Consider postponing the issuance of any new notices of cancellation or nonrenewal until April 30, 2020 or later based on individual circumstances.
  • Continue coverage on policies with unpaid premiums through at least April 30, 2020.
Undated
FAQs about Business Interruption Coverage and Coronavirus (COVID-19) 
Issuer: Illinois Department of Insurance
Directed to: General public
Summary: The FAQs address common questions regarding whether businesses can recover COVID-19 related losses from their business interruption insurance. It does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation.
The FAQs state:
  • Most business interruption insurance coverage contains a virus and bacteria exclusion that specifically excludes losses that result from any virus, bacterium, or other microorganism that induces or is capable of inducing physical distress, illness, or diseases.
  • Some policies may provide coverage for "civil authority." Civil authority provisions address the situation when government prohibits access to a business. For some business policies, COVID-19-related emergency orders only trigger coverage if COVID-19 is a "covered cause of loss."

Louisiana

Legislative Developments

Date
Legislative Development
June 14, 2021: Signed by Governor
June 1, 2021: Passed Senate (unanimously)
May 17, 2021: Amended and Passed to 3rd Reading
May 10, 2021: Referred to Committee on Insurance.
May 5, 2021: Reengrossed and sent to House.
April 4, 2021: Introduced in Senate.
2021 Louisiana Senate Bill No. 29
Title: INSURANCE COMMISSIONER: Authorizes the commissioner of insurance to take certain actions relative to insurance during a declared emergency.
Current Status: Signed into law.
Summary: The bill gives the commissioner of the Louisiana Department of Insurance authority to issue emergency rules and regulations when the governor declares a state of emergency or public health emergency, including rules or regulations that address:
  • Grace periods for payment of premiums.
  • Temporary postponement of involuntary cancellation or nonrenewal by the insurer.
Emergency rules or regulations the insurance commissioner issues pursuant to the bill must specify:
  • The kind of insurance affected.
  • The geographic area to which the emergency rule or regulation applies (which shall not be more extensive than the geographic areas in the governor's emergency declaration).
  • The effective dates of the emergency rule or regulation.
Any emergency rules or regulations the commissioner issues pursuant to the bill:
  • Are subject to legislative oversight (as defined in the Administrative Procedure Act).
  • Expire when the governor's emergency declaration expires.
May 19, 2020: Engrossed
March 31, 2020: Introduced
2020 Louisiana Senate Bill No. 477
Title: INSURANCE: Provides relative to business interruption claims due to the coronavirus disease 2019 pandemic
Current Status: Reengrossed.
Summary: Louisiana lawmakers abandoned the original version of this bill, which mandated business interruption coverage for COVID-19-related business income losses (original bill summarized below). The current version of the bill:
  • Removes the language requiring coverage for business interruption due to COVID-19 losses.
  • Changes the date on which all insurance policies covering business interruption losses must contain a notice of exclusions from August 1, 2020 to January 1, 2021.
Summary of Original Bill: This bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to include coverage for business interruption losses incurred during the COVID-19 state of emergency (subject to policy limits). It applies: 
The bill also requires all insurance policies covering business interruption losses that occur in Louisiana and involve a Louisiana business issued on or after August 1, 2020, to include a notice of all policy exclusions. The notice:
  • Must be signed by the insured.
  • Will be assumed part of the policy when issued.
  • Creates a rebuttable presumption that the insured knowingly contracted for coverage with the stated exclusions. 
March 31, 2020
2020 Louisiana House Bill No. 858
Title: INSURANCE: Provides relative to business interruption claims due to the coronavirus disease 2019 pandemic
Current Status: Read second time and referred to the Committee on Insurance on May 4, 2020.
Summary: The bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to include coverage for loss attributable to business interruption resulting from the COVID-19 pandemic (subject to policy limits).
This bill applies to insureds that:
  • Are located in Louisiana. 
  • Have less than 100 full time employees.
If enacted, the bill is to apply prospectively and retroactively to policies in effect from March 11, 2020.
March 31, 2020
2020 Louisiana Senate Bill No. 495
Title: INSURANCE POLICIES: Creates the Business Compensation Fund
Current Status: Read second time and referred to the Committee on Insurance on May 4, 2020.
Summary: This bill establishes a business compensation fund to provide a method for expediting certain property insurance claims, dispute resolution, and coverage for COVID-19-related losses. 
The bill offers insurers the option of participating in the fund. Fund participants:
  • Must contribute the greater of $50 million or 80% of the aggregate policy limits for all commercial insurance policies in force as of March 11, 2020 or anytime during the COVID-19-emergency declared by the governor of Louisiana.
  • Are immune from bad faith claims brought by any insured seeking coverage for COVID-19-related losses.
  • May challenge an insured's claim to fund proceeds as fraudulent and may contest the amount of a claim but waives the right to contest liability. 
Insureds may apply for a payment from the fund if the insured:
  • Has a policy for commercial loss that was in force on March 11, 2020 or any time during the COVID-19 emergency.
  • Sustained commercial income or revenue loss due to COVID-19.
  • Agrees to accept 80% of actual losses up to the policy limits in satisfaction of all claims for its COVID-19.-related losses.
  • Returns its application to the insurance commissioner within 90 days of the expiration of the governor's COVID-19 emergency declaration.

Regulatory Developments

Date
Regulatory Development
February 26, 2021
Bulletin 2021-03
Issuer: Louisiana Department of Insurance
Directed to: All authorized property and casualty insurers and all surplus lines insurers
Summary: The purpose of the Bulletin is to remind insurers of their good faith claims settlement and policyholder service obligations, specifically the obligations to:
  • Provide policyholders a complete copy of their policy upon request.
  • Maintain an open line of communication with their policyholders throughout the claims process, including:
    • adjustment of the claim;
    • initial proof of loss submittals;
    • supplemental proof of loss submittals, and 
    • initial and supplemental claims for damages.
  • Continue working with insureds in evaluating claims beyond the proof of loss deadline. 
April 3, 2020
37 LAC Pt XI, §§ 4005-4043
Issuer: Louisiana Administrative Code
Directed to: Any authorized insurer or surplus lines insurer operating in Louisiana
Summary: Adopts Emergency Rule 40. 
March 12, 2020
Expired
Emergency Rule 40: Moratorium on Policy Cancellations and Non-Renewals for Policyholders in Louisiana during the Outbreak of Coronavirus Disease (COVID-19) 
Issuer: Louisiana Department of Insurance
Directed to: Any authorized insurer or surplus lines insurer operating in Louisiana 
Summary: The rule imposes a moratorium on policy cancellations, non-renewals, and non-reinstatements through the earlier of May 12, 2020 or the date the governor lifts the COVID-19 State of Emergency for policyholders that had policies in effect as of March 12, 2020. The rule does not:
  • Relax insureds' obligation to pay premiums.
  • Apply to new policies issued after March 12, 2020.
Undated
Business Interruption Insurance FAQ 
Issuer: Louisiana Department of Insurance
Directed to: General public
Summary: The Louisiana Department of Insurance reviewed common business interruption policy forms, including ISO (Insurance Services Office) and AAIS (American Association of Insurance Services) forms, and published this FAQ based on the coverage they believe those forms offer. The FAQ guidance does not supersede specific policy language, applicable federal or state statutes, or Louisiana common law principles of contract interpretation.
The FAQ includes guidance on:
  • When business interruption insurance is triggered.
  • Whether business interruption insurance covers losses due to COVID-19.
  • Whether either a virus exclusion or a physical damage requirement excludes coverage for COVID-19 losses. 
  • Whether the Louisiana Governor's stay-at-home order for the COVID-19 pandemic triggers coverage under a civil authority coverage extension.

Massachusetts

Legislative Developments

Date
Legislative Development
February 18, 2021
Title: An Act Concerning Business Interruption Insurance (2021 MA H.D. 3170) and its companion bill, An Act Relative to Business Interruption Insurance (2021 MA S.D. 1845)
Current Status: Filed in the House and Senate
Summary: These companion bills propose a series of rebuttable assumptions addressing common terms in property insurance to clarify that COVID-19-related damages are recoverable under a property policy unless the insurer can show otherwise. The proposed rebuttable assumptions are that:
  • COVID-19 was present on the insured's Covered Property and caused (i) physical loss of or (ii) physical damage to that Property resulting in business interruption losses.
  • The declaration of a public health emergency “means there is (i) physical loss of or (ii) damage” to Covered Property.
  • COVID-19 was present on property other than” the Covered Property, which prohibited access to the Covered Property, thereby causing business losses.
  • Due to a civil authority order, “COVID-19 caused direct physical loss of or property damage to Covered Property” and “an action of civil authority was taken in response to dangerous physical conditions resulting from the damage[s]” to Covered Property.
  • "Direct physical loss of or damage to Covered Property” includes “restriction on operations” and “limiting customer density” or “permitting only distant customer interaction.
The bills also:
  • Preclude insurers from relying on the following exclusions to deny coverage for COVID-19-related losses:
    • pollution exclusions;
    • virus exclusions; and
    • animal infestation exclusions.
  • Require insurers to construe the following provisions to include removal or clean up expenses incurred by insureds arising from a public health emergency (declared in connection with COVID-19):
    • debris removal; and 
    • pollutant clean up.
  • Prevent insurers from denying coverage based on a policyholder's non-compliance with the following provisions unless the insurer proves it was "prejudiced directly from the insured's non-compliance":
    • notice provisions;
    • reporting provisions; or
    • suit limitation provisions (contractually limited time period to file suit).
The proposed bills apply to businesses with 50 or fewer employees that suffered business interruption losses due to a COVID-19-related public health emergency. 
March 24, 2020
Senate Docket No. 2888
Title: An Act Concerning Business Interruption Insurance
Current Status: Referred to the Committee on Financial Services
Summary: This bill requires insurers to construe business interruption insurance policies to cover COVID-19-related business interruption losses (subject to any monetary limits of the policy and any maximum length of time set out in the policy) even if the policies:
  • Exclude losses resulting from viruses.
  • Require physical damage to the relevant property. 
The Bill only applies to:
  • Insureds with 150 or fewer full-time equivalent employees.
  • Insurance policies:
    • in force on the day this bill becomes law; or 
    • that become effective before the state of emergency declared by Massachusetts' governor on March 10, 2020, is rescinded. 
An insurer that provides business interruption coverage under this bill may apply for reimbursement from a fund maintained by the Commissioner of Insurance for that purpose (all Massachusetts insurers that sell business interruption insurance will be required to pay assessments to monetize the fund).

Regulatory Developments

Date
Regulatory Development
December 29, 2020
Bulletin 2020-30: Continued Flexibility in the Issuance and Administration of Insurance During the COVID-19 (Coronavirus) Public Health Crisis
Issuer: Massachusetts Division of Insurance
Directed to: All Massachusetts insurers
Summary: This bulletin reminds insurers that pursuant to previous guidance given in Bulletin 2020-05, insurers should:
  • Give policyholders as much flexibility as reasonably possible to maintain their existing insurance coverage. 
  • Work with policyholders experiencing financial hardship to find ways to address concerns regarding the timing of premiums payments, including:    
    • relaxing due dates for premium payments;
    • extending and explaining grace periods that allow for delayed payments; 
    • waiving late fees, installment fees, non-sufficient funds fees and penalties; and
    • allowing payment plans for premiums.
Find ways to ensure that insurance policies do not lapse, including exhausting all efforts to continue coverage before considering cancellation or non-renewal.
In addition to the guidance outlined in Bulletin 2020-05, this bulletin directs insurers to maintain customer support services and proactively provide policyholders with information about how to reach these services.
May 18, 2020
Bulletin 2020-17: Flexibility in the Administration of Vacancy Clauses During COVID-19 (Coronavirus) Public Health Crisis
Issuer: Massachusetts Division of Insurance
Directed to: All insurance carriers issuing property and casualty coverage in Massachusetts
Summary: This bulletin directs insurers to give policyholders as much flexibility as reasonably possible to maintain their existing insurance coverage when enforcing vacancy provisions in commercial policies. 
Generally, vacancy provisions limit coverage in the event that a property is vacant for a certain number of days. This bulletin states that commercial policy carriers "should be looking for all ways to be flexible in counting days of vacancy to provide coverage." Specifically, insurers must:
  • Take steps to be flexible with vacancy clauses issued to businesses that:
    • are not "essential" under state emergency orders; or
    • have not been allowed to operate under COVID-19 rules.
  • Exclude days that a property is vacant due to the Governor's emergency orders when counting days that a property is considered vacant.
March 23, 2020
Bulletin 2020-05: Flexibility in the Issuance and Administration of Insurance during COVID-19 (Coronavirus) Public Health Crisis
Issuer: Massachusetts Division of Insurance
Directed to: All Massachusetts insurers
Summary: This bulletin directs insurers to:
  • Give policyholders as much flexibility as reasonably possible to maintain their existing insurance coverage. 
  • Work with policyholders experiencing financial hardship to find ways to address concerns regarding the timing of premiums payments, including:    
    • relaxing due dates for premium payments;
    • extending and explaining grace periods that allow for delayed payments; 
    • waiving late fees, installment fees, non-sufficient funds fees and penalties; and
    • allowing payment plans for premiums.
  • Find ways to ensure that insurance policies do not lapse, including exhausting all efforts to continue coverage before considering cancellation or non-renewal.
Undated
Questions about Business Interruption Insurance 
Issuer: Massachusetts Division of Insurance
Directed to: General public
Summary: This document answers common questions policyholders have regarding business interruption insurance coverage for COVID-19 related losses. It does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation.
The document advises:
  • It is unlikely that a current business interruption policy contemplated COVID-19 specifically.
  • Policy language dictates whether COVID-19 losses are covered. 
  • Some policies have exclusions likely to apply to epidemics or pandemics, including COVID-19.
  • A state of emergency or stay-at-home order is not likely to trigger business interruption insurance unless there is property damage.
  • Contingent business interruption insurance may provide coverage for a policyholder's COVID-19 losses if damage to someone else's property interrupted the policyholder's business.

Michigan

Legislative Developments

Date
Legislative Development
June 25, 2020
House Bill N. 5928 (2020)
Title: A bill to amend 1956 PA 218, entitled "The insurance code of 1956" (by amending sec. 2236 of (MCL 500.2236) and by adding sec. 2245)
Current Status: Refereed to the Committee on Insurance
Summary: This bill requires insurers that issue or renew business interruption policies from the effective date of the bill forward to construe the polices to include loss of use and occupancy, loss of income, or other business interruption losses directly or indirectly related to any of the following as covered perils:
  • The global COVID-19 pandemic (including any mutated form of the COVID-19 virus).
  • Any COVID-19-related executive order issued by the governor.
  • Any COVID-19-related order issued by a civil authority.
The bill also prohibits insurers from denying a claim for either of the following reasons:
  • There is no physical damage to the property of the insured or to any other property relevant to a consideration of coverage.
  • The loss is a result of COVID-19, regardless of whether the policy includes a virus exclusion. 
Finally, the bill requires insurers to automatically renew any business interruption policy that expires after December 31, 2019 but before 6 months after the expiration of the COVID-19 state of emergency declared under Executive Order No. 2020-4 or any extension of that order at the same premium charged for the same coverage under the expiring qualified insurance policy.
April 24, 2020
House Bill No. 5739 (2020)
Title: A bill to amend 1956 PA 218, entitled "The insurance code of 1956"
Current Status: Referred to the Committee on Insurance
Summary: This bill requires insurers that issue or renew business interruption policies from the effective date of the bill forward to include coverage for COVID-19 business interruption losses for the duration of the governor's declaration of state of emergency. It applies to policies issued to businesses with less than 100 employees.
The bill does not include any procedure for reimbursing insurers that indemnify insureds from COVID-19-related losses.

Regulatory Developments

Date
Regulatory Development
October 19, 2020
Bulletin No. 2020-41-INS/BT/BF/CU: In the Matter of: Compliance With House of Representatives, MDDHS Emergency Order, MIOSHA Emergency Rules, and Legislation Relating To COVID-19
Issuer: State of Michigan Department of Insurance and Financial Services
Summary: This bulletin supersedes Bulletin 2020-38-INS/BT/CF/CU and is issued to reflect the recent ruling by the Michigan Supreme Court in House of Representatives v. Governor, which stated that the COVID-19 Emergency Orders issued by the Governor are no longer of legal effect ( (Mich. Oct. 12, 2020)). This bulletin informs regulated entities that the Department is currently determining how the Court's decision affects all bulletins, orders and guidance it has issued pertaining to COVID-19 to determine if modification is required and instructs that insurers must remain in compliance with all current bulletins, orders and guidance. 
The bulletin also requires regulated entities and individuals to:
  • Remain in compliance with new or amended COVID-19 related laws that may require them to refrain from certain actions.
  • Comply with the Michigan Department of Health and Human Service Emergency Order titled "Gathering Prohibition and Face Covering Order" dated October 9, 2020.
  • Comply with applicable provisions of the Emergency Rules filed by the Michigan Occupational Safety and Health Administration on October 14, 2020, titled "Coronavirus Disease 2019 (Covid-19)," and any other applicable law, rule, or regulation related to the COVID-19 public health emergency or other emergency issued or enacted at the federal, state, or local level.
October 6, 2020
Superseded
Bulletin 2020-38-INS/BT/CF/CU: In re Certified Questions (Midwest Inst of Health v Governor) and October 5, 2020, DHHS Emergency Order
Issuer: State of Michigan Department of Insurance and Financial Services
Directed to: All insurers doing business in Michigan, regardless of line of coverage.
Summary: This bulletin clarifies the effect of the Michigan Supreme Court's ruling in In re Certified Questions (Midwest Inst. of Health v. Governor) ( (Mich, October 2, 2020)) on bulletins, orders, and other guidance issued by the Department in response to the COVID-19 public health emergency. The bulletin essentially provides that because the ruling was issued in the context of a federal action and that court has not issued an order, as of this date, all Department bulletins, orders, and any other guidance issued are to remain in effect.
April 13, 2020
Bulletin 2020-16-INS: In the Matter of Insurer Flexibility Due to COVID-19
Issuer: State of Michigan Department of Insurance and Financial Services
Directed to: All insurers doing business in Michigan, regardless of line of coverage.
Summary: This bulletin advises all insurers doing business in Michigan, regardless of the line of coverage, to "consider flexibility" to help insureds experiencing financial hardship during the COVID-19 pandemic. This includes, but is not limited to:
  • Providing insureds with at least a 60-day grace period to pay premiums which insurers may effectuate by, for example:
    • allowing consumers to defer payments without incurring interest (and without requiring a balloon payment at the end of the grace period);
    • extending payment due dates; and
    • waiving late fees.
  • Discussing policy options available to insureds that might lower the amount of premium owed.
  • Adjusting claim filing deadlines, including by relaxing:
    • notice requirements;
    • requirements that insureds file claims within a certain time period;
    • sworn proof of loss requirements; and
    • examination under oath requirements.
The bulletin also requires insurers that take measures to provide flexibility due to COVID-19 to submit a plan to the Director of Insurance and Financial Services regarding the steps they will follow to implement flexibility for their insureds, including:
  • A description of any measures taken.
  • How insureds will be notified of the flexibility. 
  • How claims will be handled during the defined time period.
  • An estimate of when the measure will cease.

Nevada

Regulatory Developments

Date
Regulatory Development
June 16, 2020
Notice of Disallowance of New Exclusions Related to COVID-19, Viruses, or Pandemics
Issuer: State of Nevada Department of Business and Industry, Division of Insurance
Directed to: Property and casualty insurers.
Summary: In an effort to protect consumers against ambiguity about policy interpretation and the "unexpected narrowing of previously expected insurance coverage during a time of great uncertainty and financial strain," this notice advises all property and casualty insurers offering business interruption coverage that: 
  • Until the Governor's state of emergency is lifted, the Division will not approve any new policy or endorsement language that includes coverage exclusions specifically mentioning: 
    • COVID-19; 
    • viruses; or 
    • pandemics. 
  • If approval has already been submitted and received for these exclusions on or after March 12, 2020, the insurer should voluntarily withdraw the exclusionary language.

New Jersey

Legislative Developments

Date
Legislative Development
March 16, 2020
2020 New Jersey Assembly Bill No. 3844
Title: An Act concerning certain covered perils under business interruption insurance
Current Status: Reported out of Assembly Homeland Security and State Preparedness Committee; not yet scheduled for a vote before the General Assembly
Summary: If passed, this bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to include coverage for business interruption losses incurred during the COVID-19 state of emergency declared by New Jersey's governor (subject to policy limits). The bill is retroactive to policies in effect on March 9, 2020. 
The bill only applies to policies issued to insureds whose business:
  • Is located in New Jersey.
  • Employs 100 or fewer employees.
  • Is covered by a business interruption policy on the date the bill becomes law. 
An insurer that provides business interruption coverage under this bill may apply for reimbursement from a special purpose apportionment fund maintained by the Commissioner of Banking and Insurance for that purpose (the Commissioner of Banking and Insurance can require New Jersey insurers that sell business interruption insurance to pay "amounts as may be necessary" to monetize the fund).

Regulatory Developments

Date
Regulatory Development
April 10, 2020
Bulletin 20-15: 90-Day Grace Period for Property and Casualty Insurance Premium Payments Due to the Disruption Caused by COVID-19 
Issuer: New Jersey Department of Banking and Insurance
Directed to: All entities transacting property and casualty insurance in New Jersey
Summary: This bulletin directs insurers to provide insureds experiencing financial hardship due to COVID-19 with at least a 90-day grace period to pay insurance premiums. Policyholders can elect that the grace period begin retroactively on April 1, 2020 or on May 1, 2020.
Insurers must also:
  • Waive late payment fees.
  • Not report late payments to credit agencies during the 90-day grace period.
  • Allow premiums due but not paid during the 90-day period to be paid over the remainder of the current policy term or up to 12 months, in up to 12 equal installments, whichever is longer. The insurer may, however, permit a longer repayment period.
  • Ensure that late payments during the 90-day period are not considered in any future premium calculations at any time (that is, applicable late payments should not be counted for any rating, pricing, tiering attributes, and so on).
  • Provide each policyholder with an easily readable written description of the terms of the extended grace period offered under this Bulletin.
March 19, 2020
Bulletin 20-04: Disruption Resulting from COVID-19 
Issuer: New Jersey Department of Banking and Insurance
Directed to: All regulated entities
Summary: This bulletin encourages insurance companies to assist policyholders by:
  • Relaxing due dates for premium payments and insurance policy-based loan payments.
  • Extending grace periods.
  • Waiving late fees and penalties.
  • Allowing forbearance regarding cancellation and non-renewal of policies.
  • Allowing payment plans for premium payments.
  • Exercising judicious efforts to work with policyholders to ensure policies do not lapse.

New York

Legislative Developments

Date
Legislative Development
November 6, 2020
New York State Assembly A.B. 11147 (NS) and A.B. 41 (NS)
Title: An act to direct the department of financial services to study and report upon the adequacy and affordability of business interruption insurance
Current Status: Introduced November 6, 2020; currently 
Summary: This bill directs the department of financial services to study and report upon the adequacy and affordability of business interruption insurance coverage for pandemics, viruses, and other public health emergencies. The bill includes a detailed list of topics that the report must include, such as:
  • The present state of the marketplace regarding pandemic-related insurance coverage for business interruption policies.
  • Prevailing reasons for the denial of insurance coverage for business interruption policies related to pandemics, viruses, infectious diseases, and other common exclusions.
  • Analysis as to the necessity of federal intervention to ensure business interruption insurance coverage for pandemic-related events.
  • Concerns associated with removing the typical physical damage requirement traditionally found in business interruption insurance policies.
  • The extent to which exclusions and uninsurable events are appropriately and unambiguously disclosed to policyholders.
The directs the superintendent of financial services to submit the report to the governor, temporary president of the senate, and speaker of the assembly within 180 days of the effective date.
April 8, 2020
New York State Assembly Bill A10226B and New York Senate Bill S8211A
Title: An Act in relation to requiring certain perils be covered under business interruption insurance during the coronavirus disease 2019 (COVID-19) pandemic
Current Status: Amended and recommitted to New York's Committee on Assembly Insurance on April 29, 2020.
Summary: New York State Assembly Bill A10226B is the amended version of New York State Assembly bill A10226A and is identical to New York Senate Bill S8211A. The amended bill requires insurers to construe all in-force business interruption insurance policies to include coverage for business interruption losses during the COVID-19 state of emergency, including by specifically voiding policy provisions that:
  • Allow insurers to deny coverage based on "a virus, bacterium, or other microorganism that causes disease, illness, or physical distress or that is capable of causing disease illness, or physical distress." 
  • Require physical damage, to the extent those provisions do not include COVID-19 as a physical loss. 
The bill also automatically renews business interruption policies that expire during the COVID-19 state of emergency at the current premium.
The bill applies to policies:
  • In effect on March 7, 2020 and is retroactive to policies in effect on that date.
  • Issued to insureds whose business has less than 250 employees.
Insurers and excess lines insurers that indemnify an insured under this bill may apply to the superintendent of financial services for reimbursement from a special purpose apportionment fund, and the superintendent of financial services is authorized to collect "amounts as may be necessary" from New York insurers to monetize that fund.
March 27, 2020
New York State Assembly Bill A10226A
Title: Relates to requiring certain perils be covered under business interruption insurance during the coronavirus disease 2019 (COVID-19) pandemic
Current Status: Amended and recommended to New York's Committee on Assembly Insurance as New York State Assembly Bill A10226B
Summary: This bill requires insurers to construe all in-force business interruption insurance policies to include coverage for business interruption losses during the COVID-19 state of emergency.
The bill applies to policies:
  • In force as of March 7, 2020.
  • Issued to insureds whose business has less than 100 employees.
The bill also authorizes the superintendent of financial services to collect "amounts as may be necessary" from New York insurers to monetize a special purpose apportionment fund. An insurer that indemnifies an insured under this bill may apply to the superintendent of financial services for reimbursement from the fund.

Regulatory Developments

Date
Regulatory Development
June 28, 2020
Expired
Insurance Regulation 216: Insurer Practices During The COVID-19 Pandemic
Issuer: New York State Department of Financial Services
Directed to: All regulated entities
Summary: This emergency regulation extends the emergency Insurance Regulation that was issued on March 30, 2020 until July 6, 2020. This date may be extended further.
To provide guidance on the initial emergency regulation and this extension, the Department of Financial Services has updated its Coronavirus (COVID-19) Information for Industry Property/Casualty Emergency Regulation FAQs.
June 4, 2020
Emergency Amendment to Insurance Regulation 64, Unfair Claims Handling 
Issuer: New York State Department of Financial Services
Directed to: All insurers doing business in New York
Summary: This emergency amendment prohibits insurers from engaging in certain acts against policyholders that suffered property damage due to protest events that took place in New York in early June, including vandalism and looting. It applies to claims filed after May 30, 2020.
Policyholders that suffered business interruption losses due to the COVID-19 pandemic that also have a claim for property damage due to the protest events that took place in early June are entitled to the protections provided in this emergency amendment, including that insurers must:
  • Begin investigations within six days of claim receipt or by June 5, 2020 (whichever is later).
  • Provide specific explanations for delays in investigations.
  • Provide claimants with written notice of all items it believes will be needed for claim adjustment within six days of claim receipt or by June 5, 2020 (whichever is later).
  •  Within 15 days of receipt of proof of loss, either:
    • pay the claim; or
    • notify the insured that more time for investigation is required and provide follow up letters every 30 days. 
  • Advise individual and small business insureds of the right to mediation if their claim is denied, disputed, or unresolved after 45 days. 
The emergency amendment also:
  • Allows claimants to submit notice of claims to agents of the insurer (unless the law or the policy provides otherwise). 
  • Allows insureds to start immediate repairs if it is needed to protect health or safety and provide proof of loss for the repaired damage through video or photos.
March 30, 2020
Expired
Insurance Regulation 216: Insurer Practices During The COVID-19 Pandemic
Issuer: New York State Department of Financial Services
Directed to: All regulated entities
Summary: This emergency regulation provides relief to New York consumers and small businesses experiencing financial hardship due to COVID-19. It:
  • Prohibits New York State regulated issuers of property and casualty insurance from cancelling, non-renewing, or conditionally renewing the policies of qualifying policyholders for a 60-day moratorium period. 
  • Allows policyholders demonstrating financial hardship due to COVID-19 to defer paying premiums during the 60 day moratorium period without penalty. 
To provide guidance on this Emergency Regulation, the Department of Financial Services issued Coronavirus (COVID-19) Information for Industry Property/Casualty Emergency Regulation FAQs.  
March 19, 2020
Insurance Circular Letter No. 7 (2020): Guidance to Department of Financial Services Regulated Insurance Entities Regarding Support for Consumers and Businesses Impacted by COVID-19
Issuer: New York State Department of Financial Services
Directed to: All regulated entities
Summary: This letter urges all insurance companies to help alleviate the adverse impact of COVID-19 on policyholders that can demonstrate financial hardship, including by:
  • Offering payment accommodations for policyholders that cannot make timely payments of premiums or fees due to COVID-19-related disruptions, including:
    • allowing policyholders to defer payments at no cost;
    • extending payment due dates; or 
    • waiving late or reinstatement fees.
  • Working with policyholders to avoid cancellation of insurance policies for:
    • failure to pay premiums on time; 
    • discovery of acts or omissions that may have increased the hazard insured against; and
    • physical changes in the insured property that result in the property no longer meeting the insurer's underwriting standards.
  • Working with policyholders to avoid non-renewal of insurance policies where a policyholder fails to timely respond to a non-renewal notice.
  • Increasing resources to accommodate increased claim submissions and increased inquiries from policyholders about policy coverage benefits, including reviewing staffing plans to ensure that personnel are:
    • available to field claim submissions or inquiries; and 
    • informed on the most up-to-date developments relating to COVID-19.
  • Preparing clear and concise descriptions of coverage benefits that may be triggered as the COVID-19 situation continues to evolve, which should be: 
    • posted prominently on insurance company and producer websites; and 
    • sent in response to policyholder inquiries. 
March 10, 2020 
New York Insurance Law Section 308 Letter: Call for Special Report re: Business Interruption and Related Coverage Written in New York
Issuer: New York Department of Financial Services
Directed to: All authorized property and casualty insurers
Summary: The letter directs all property and casualty insurers that provide business interruption coverage in New York to send a "clear and concise explanation of benefits" to all commercial policyholders. The explanation should include:
  • A description of the policyholder's commercial property insurance or related coverage.
  • Whether the policy covers "business interruption." If it does, the insurer must also:
    • provide a list of the covered perils under the policy; 
    • indicate whether the policy contains a requirement for "physical damage or loss" and explain whether contamination related to a pandemic may constitute "physical damage or loss;" and 
    • describe what type of damage or loss triggers coverage under the policy.
  • Whether the policy includes "civil authority" coverage. If it does, the insurer must also:
    • describe type of damage or loss triggers coverage under the policy; 
    • describe any relevant limitations under the policy; and
    • explain whether a civil authority prohibiting or impairing the policyholder's access to its covered property in connection with COVID-19 is sufficient for coverage under the policy.
  • Whether the policy includes "contingent business interruption" coverage. If it does, the insurer must also:
    • describe what type of damage or loss triggers coverage under the policy;
    • provide the "covered perils" under the policy; and
    • state whether the policy contains a requirement for "physical damage or loss" and explain whether contamination related to a pandemic may constitute "physical damage or loss".
  • Whether the policy includes "supply chain" coverage. If it does, the insurer must also:
    • state if the coverage limited to named products or services from a named supplier or company; and
    • state whether the policy contains a requirement for "physical damage or loss" and explain whether contamination related to a pandemic may constitute "physical damage or loss." 
  • The required waiting periods under the policy.
Undated
Coronavirus (COVID-19) Information for Industry Property/Casualty Emergency Regulation FAQs
Issuer: New York Department of Financial Services
Directed to: Information for Industry
Summary: The FAQs clarify the March 30, 2020 Emergency Regulation, which imposed a moratorium on insurance premium payments for small businesses experiencing financial hardship related to COVID-19. The FAQs state that:
  • The Emergency Regulation applies retroactively to policies in effect on March 30, 2020, regardless of whether:
    • the insurer had issued a notice of cancellation, non-renewal, or conditional renewal before that date; or
    • the policy was already in a grace period.
  • Policyholders can demonstrate financial hardship for purposes of the Emergency Regulation by submitting a sworn statement that they are experiencing financial hardship as a result of the COVID-19 pandemic (notarization is not required).
  • The moratorium:
    • begins on the day the insurer could have cancelled, non-renewed, or conditionally renewed the policy; and
    • protects the policyholder from cancellation, non-renewal, or conditional renewal for 60 days.
  • After the moratorium expires:
    • the insurer must give the policyholder the opportunity to repay late premium payments in 12 monthly installments; and
    • the insurer cannot terminate or conditionally renew the policy immediately after the expiration of the moratorium based on the policyholder's past failure to pay the premium due to financial hardship as a result of COVID-19.
Undated
Business Interruption FAQs
Issuer: New York Department of Financial Services
Directed to: General public
Summary: The FAQs answer common questions policyholders have regarding business interruption insurance coverage for COVID-19 related losses. The FAQ guidance does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation.
The FAQs address questions including:
  • How business interruption coverage works if coverage is available under more than one business interruption policy.
  • How to obtain coverage for business income losses from policies other than business interruption policies. 
  • The distinction between business interruption coverage and contingent business interruption coverage.
  • Whether business interruption policies cover COVID-19 losses, including exclusions that may apply. 
  • How the Governor's State of Emergency declaration affects the availability of business interruption coverage for COVID-19 losses.

Ohio

Legislative Developments

Date
Legislative Development
March 24, 2020
2019 Ohio House Bill No. 589
Title: To require insurers offering business interruption insurance to cover losses attributable to viruses and pandemics and to declare an emergency
Current Status: Referred to Committee
Summary: The bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to cover business interruption losses incurred during the COVID-19 state of emergency declared by Ohio's governor even if the policy includes a:
  • Physical damage requirement.
  • Exclusion for damage resulting from virus or bacteria (subject to policy limits).
The bill only applies to policies issued to insureds whose business: 
  • Is located in Ohio.
  • Has 100 or fewer employees. 
  • Is covered by a business interruption policy on the date the bill becomes law.
The bill also creates a Business Interruption Insurance Fund. All Ohio insurers must pay assessments to monetize the fund. Any insurer that indemnifies an insured under this bill may apply to the superintendent of insurance for reimbursement from the fund.

Regulatory Developments

Date
Regulatory Development
October 2, 2020
Bulletin 2020-12: Property and Casualty, Life, and Long Term Care Insurance Premium Payments During State of Emergency
Issuer: Ohio Superintendent of Insurance
Directed to: All insurers providing property and casualty, life, and long term care insurance policies in the State of Ohio
Summary: This bulletin replaces Bulletin 2020-07. The bulletin encourages insurers to provide flexibility to insureds during the COVID-19 state of emergency. Specifically, insurers are encouraged and requested to:
  • Provide insureds with a grace period to pay premiums and submit information or documentation to process claims. 
  • Offer payment accommodations if insureds cannot make payments due to COVID-19 related disruptions, such as:
    • allowing consumers to defer payments at no cost;
    • extending payment due dates; and
    • waiving late or reinstatement fees.
The bulletin does not:
  • Require insurers to waive any premiums or other amounts due on any policy or contract.
  • Prohibit insurers from cancelling or not renewing a policy for any lawful reason.
October 2, 2020 
Bulletin 2020-11: Rescission Of Bulletin 2020-07
Issuer: Ohio Superintendent of Insurance
Summary: This bulletin rescinds Bulletin 2020-07 and states that it will be replaced by Bulletin 2020-12, effective October 2, 2020.
March 30, 2020  Rescinded
Bulletin 2020-07: Property and Casualty, Life, and Long Term Care Insurance Premium Payments During State of Emergency 
Issuer: Ohio Superintendent of Insurance
Directed to: All insurers providing property and casualty, life, and long term care insurance policies in the State of Ohio
Summary: This bulletin requires all insurance companies to: 
  • Provide their insureds with at least a 60-day grace period for the payment of premiums and submission of information, including documentation to support insurance claims. 
  • Offer payment accommodations if consumers cannot make payments due to COVID-19 related disruptions, such as:
    • allowing consumers to defer payments at no cost;
    • extending payment due dates; and
    • waiving late or reinstatement fees.

Pennsylvania

Legislative Developments

Date
Legislative Development
August 7, 2020
2019 Pennsylvania House Bill No. 2759
Title: An Act regulating business interruption insurance during a state of disaster emergency ("Business Interruption Insurance Act")
Current Status: Referred to the Pennsylvania House of Representatives Insurance Committee
Summary: This bill requires insurers to construe all property and casualty insurance policies that include business interruption coverage and were in-force on the date the COVID-19 state of emergency was declared by Pennsylvania's governor to cover business interruption losses incurred during the state of emergency. Coverage is to be provided even if the policy contains exclusions for viruses or pandemics. 
The Bill only applies to polices that are both:
  • Issued to insureds that have less than 100 employees in Pennsylvania working a normal work week of at least 25 hours.
  • In effect on or before the date the COVID-19 state of emergency was declared. 
Insurers that pay COVID-19-related business interruption claims can apply to the Pennsylvania Insurance Commissioner for relief and reimbursement, which is to be paid from "special purpose apportionments" the Commissioner collects from property and casualty insurers.
April 30, 2020
2019 Pennsylvania Senate Bill No. 1127
Title: An Act relating to property and business interruption insurance coverage for COVID-19 Pandemic-related losses
Current Status: Referred to the Pennsylvania Senate Banking and Insurance Committee
Summary: This bipartisan bill, unlike other legislation already pending in Pennsylvania, does not require insurers to construe policy language to provide business interruption coverage; rather, it declares that "certain arguably ambiguous policy terms shall be interpreted broadly in favor of business interruption coverage." Specifically, it declares that:
  • The reasonable interpretation of the phrases "direct physical loss, damage or injury to tangible property," and similar policy terms, encompasses the presence of the COVID-19 coronavirus in "a building, an office, a retail space, a structure, a plant, a facility, a commercial establishment or other area of business activity."
  • The presence of the COVID-19 coronavirus may be established by a policyholder's demonstration that a person infected with COVID-19 has been present either in the business location itself or in the municipality of that location, or that the presence of the coronavirus otherwise has been detected in the location.
  • The order of Pennsylvania Governor Tom Wolf, dated March 19, 2020, regarding closure of all businesses that are not life-sustaining, constitutes an order of civil authority and/or an order restricting ingress/egress that was issued as a direct result of physical damage at and/or in the immediate vicinity of business locations impacted by the order.
  • A business location in which a person infected with COVID-19 either has been present in the location itself or in the municipality of that location, or if the coronavirus has otherwise been detected as being present therein, such presence satisfies the "actual and not suspected presence" condition of the policy.
  • A loss-of-market exclusion only precludes coverage if a policyholder's goods or services are no longer competitive in the marketplace. It does not preclude coverage if the market for the policyholder's goods or services no longer exists; for example, if the policyholder no longer has access to the market.
April 15, 2020
2019 Pennsylvania Senate Bill No. 1114
Title: An Act providing for coverage under business interruption insurance during the COVID-19 disaster emergency
Current Status: Referred to the Pennsylvania Senate Banking and Insurance Committee
Summary: This bill, like the bill introduced into the Pennsylvania House, assists policyholders that are suffering from the "major economic upset" of COVID-19. If passed, the bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to cover business interruption losses (subject to policy limits) due to:  
  • The COVID-19 state of emergency declared by Pennsylvania's governor.
  • A civil authority order related to the COVID-19 declared disaster emergency and exigencies caused by the COVID-19 disease.
  • Property damage related to COVID-19, which the bill defines as the presence of:
    • "a person positively identified as having been infected with COVID-19" on the insured property;
    • "at least one person positively identified as having been infected with COVID-19 in the same municipality of this Commonwealth where the property is located;" or
    • "COVID-19 having otherwise been detected in this Commonwealth."
The bill applies to all Pennsylvania entities with business interruption coverage in effect before March 6, 2020, but if the insured does not meet the definition of a "small business" (as provided in the bill) it is only eligible to receive 75% of the policy limit for the eligible claims. 
April 6, 2020
2019 Pennsylvania House Bill No. 2386
Title: An act Providing for COVID-19 disaster emergency business interruption grants
Current Status: Referred to the Pennsylvania House of Representatives Insurance Committee.
Summary: Establishes the COVID-19 Disaster Emergency Business Interruption Grant Program. Businesses are eligible for a grant if the business:
  • Submitted a BI claim that was denied.
  • Demonstrates that it has been adversely impacted by COVID-19.
  • Grants cannot exceed the amount of the insurance claim.
  • Businesses can apply for a grant for the duration of the COVID-19 emergency and for 60 days after the COVID-19 emergency is terminated by executive order or operation of law.
April 3, 2020
2019 Pennsylvania House Bill No. 2372
Title: An Act providing for insurance coverage for business interruption
Current Status: Referred to the Pennsylvania House of Representatives Insurance Committee.
Summary: The bill, like the bill introduced into the Pennsylvania Senate, requires insurers to construe all in-force property insurance policies that include business interruption coverage to cover business interruption losses incurred during the COVID-19 state of emergency declared by Pennsylvania's governor (subject to policy limits). It only applies to polices:
  • Issued to insureds that have less than 100 employees in Pennsylvania working a normal work week of at least 25 hours; and
  • In effect on or before March 6, 2020. 
Insurers that pay COVID-19-related business interruption claims can apply to the Pennsylvania Insurance Commissioner for relief and reimbursement, which is to be paid from "special purpose apportionments" the Commissioner collects from property and casualty insurers.

Regulatory Developments

Date
Regulatory Development
April 24, 2021
Notice 2021-04: Notice Regarding the Need to Assess the Impacts of the COVID-19 Pandemic in Property and Casualty Rate Filing
Issuer: Pennsylvania Insurance Commissioner Jessica Altman
Directed to: Pennsylvania property and casualty insurers
Summary: Pennsylvania Insurance Commissioner Jessica Altman issued a Notice directing Pennsylvania property and casualty insurers to consider the lasting impacts of the COVID-19 pandemic in their rate filings. Specifically:
  • For property and casualty insurance products impacted by the pandemic, insurers, rating organizations, and third-party filers must include in their rate filings:
    • a section describing their analysis and assessment of the impacts of the pandemic on the product and how this has been accounted for in the filing; and 
    • five years' worth of claim frequency data showing claim frequency statistics, by month, on both a state-wide and nationwide basis.
  • For property and casualty insurance products that insurers, rating organizations, and third-party filers believe have not been impacted by the pandemic:
    • rate filings should include a specific section describing why they believe there has not been an impact; and 
    • filers should be prepared to provide the previously-mentioned claim frequency statistics to support this assessment, if requested.
May 11, 2020
Press Release: Risks and Increased Liability Accompany Non-Compliance with Business Closure Orders
Issuer: Pennsylvania Insurance Commissioner Jessica Altman
Directed to: Pennsylvania businesses and residents
Summary: Pennsylvania Insurance Commissioner Jessica Altman issued a press release to remind businesses of the importance of complying with the COVID-19-related business closure orders issued by Governor Tom Wolf and Department of Health Secretary Rachel Levine. In addition to critical public health objectives, Commissioner Altman warned:
  • Many insurance policies contain provisions that exclude coverage for businesses or individuals engaging in illegal acts or conduct. These exclusions may apply to property coverage, liability coverage, advertising injury coverage, and a host of other essential coverages.
  • "Businesses and residents rely on insurance coverage to protect them from liability, pay for covered losses, and compensate those who may be injured or harmed," said Altman. "It is the duty of every business and resident in Pennsylvania to ensure that they and the public at large are provided with the maximum level of protection afforded by insurance. Any actions that could potentially create coverage gaps are the antitheses of the civil duty required of all residents during these times of emergency."
March 19, 2020
Notice 2020-04: Notice to Insurance Companies Regarding Policyholders Affected by the COVID-19 Virus 
Issuer: Pennsylvania Insurance Commissioner
Directed to: All licensed insurance companies
Summary: This notice encourages insurance companies to:
  • Relax due dates for premium payments.
  • Extend grace periods.
  • Waive late fees and penalties. 
  • Allow payment plans for premiums to avoid a lapse in coverage.
  • Consider policy cancellation or non-renewal only after exhausting all efforts to work with policyholders to continue coverage.
Undated
FAQ: COVID-19 Business Interruption Insurance 
Issuer: Pennsylvania Insurance Department
Directed to: General public
Summary: The FAQ answers common questions policyholders have regarding business interruption insurance coverage for COVID-19 related losses. The FAQ guidance does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation.
The FAQ advises:
  • Business interruption insurance does not usually cover communicable diseases, such as COVID-19, because coverage requires property damage. 
  • Civil authority coverage may provide coverage for COVID-19 losses caused when access to a policyholder's business is restricted due to a governmental order.
  • Contingent business interruption coverage provides coverage when:
    • a supply chain disruption causes an interruption in the policyholder's business; and
    • the policyholder's supply chain partner's property suffers physical damage.
  • The Governor's declaration of a State of Emergency does not change the terms of a policyholder's business interruption insurance.

South Carolina

Legislative Developments

Date
Legislative Development
April 8, 2020
South Carolina Senate Bill 1188
Title: Relating to property insurance generally
Current Status: Referred to the South Carolina Senate Banking and Insurance Committee
Summary: This bill requires insurers to construe all in-force property insurance policies that include business interruption coverage to include among the covered perils loss "directly or indirectly resulting from the global pandemic known as COVID-19, including all mutated forms of the COVID-19 virus." It provides that an insurer cannot deny coverage due to:
  • COVID-19 being a virus, even if there is an exclusion in the policy for losses resulting from viruses.
  • There being no physical damage to the property of the insured or to any other relevant property.
  • Orders issued by any civil authority or acts or decisions of a governmental entity. 
This Bill only applies to:
  • Insureds with 150 or fewer full-time equivalent employees.
  • Insurance policies:
    • in force on the day this bill becomes law; or 
    • that become effective before the state of emergency declared by South Carolina's governor is rescinded. 
An insurer that provides business interruption coverage under this bill may apply for reimbursement from a fund maintained by the department of insurance for that purpose (all South Carolina insurers will be required to pay assessments to monetize the fund).

Regulatory Developments

Date
Regulatory Development
March 25, 2020
Bulletin 2020-02, issued by the South Carolina Department of Insurance
Issuer: South Carolina Department of Insurance
Directed to: All insurers, health maintenance organizations, adjusters, producers, and other persons licensed and authorized to transact the business of insurance within the State of South Carolina.
Summary: This bulletin states that insurers should provide relief for South Carolina citizens and businesses directly impacted by COVID-19 by: 
  • Extending the deadlines for premium payments.
  • Providing additional time before cancellations and non-renewals become effective.
  • Extending proof of loss deadlines.
  • Waiving fees, penalties, and other charges for the failure to submit premium payments or otherwise respond due to the pandemic.
Undated
FAQ: Business Interruption Insurance Coverage and the Coronavirus (COVID-19) 
Issuer: South Carolina Department of Insurance
Directed to: General public
Summary: This FAQ answers common questions policyholders have regarding business interruption insurance coverage for COVID-19 related losses. The FAQ guidance does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation. 
The FAQ advises that there is likely no coverage under typical business interruption policies because losses occurring as a result of a virus or bacteria are usually excluded.

Texas

Regulatory Developments

Date
Regulatory Development 
March 23, 2020
Commissioner's Bulletin # B-0007-20: COVID-19 Claim-Handling Deadlines and Premium Payments 
Issuer: Texas Insurance Commissioner
Directed to: Insurers licensed in Texas
Summary: This bulletin provides clarification to insurers regarding the impact of the Texas Governor's March 20, 2020 order suspending certain claims-handling deadlines and the Insurance Commissioner's determination that COVID-19 is a disaster under the Texas Insurance Code Section 542.059(b). Taken together, the two actions extend claim-handling deadlines imposed by the state's prompt payment laws for an additional 15 days. Insurers must continue to promptly:
  • Identify, evaluate, and resolve claims.
  • Acknowledge receipt of a claim.
  • Make appropriate assignments for the investigation of a claim. 
Undated 
FAQ: Industry and Business Issues Related to COVID-19
Issuer: Texas Department of Insurance
Directed to: General public and insurance industry
Summary: This FAQ answers questions insurers and policyholders may have regarding COVID-19-related polices governing the insurance industry and business interruption insurance coverage for COVID-19-related damages. The FAQ guidance does not supersede specific policy language, applicable state or federal statutes, or common law principles of contract interpretation. 
The FAQ advises that:

Washington

Legislative Developments

Date
Legislative Development
January 26, 2021
Title: Concerning business interruption insurance claims (2021 WA S.B. 5351) 
Current Status: Introduced
Summary: This bill helps small businesses trying to recover COVID-19-related claims under business interruption insurance policies by codifying favorable language in recent policyholder-friendly court rulings and by giving small businesses an additional year to challenge the denial of COVID-19-related business interruption claims (beyond the current one-year limit).
Specifically, the bill states: "Every property insurance policy containing a grant of coverage for direct physical loss of or damage to property shall be construed to include the deprivation of such property and the loss of the ability to use such property." It would apply to all causes of action commenced on or after the bill's effective date, "regardless of when the cause of action arose," and applies retroactively to February 29, 2020 (the date Washington state declared a state of emergency).

Wyoming

Legislative Developments

Date
Legislative Development
May 15, 2020
Wyoming Senate File 1004 and House Bill 1004
Title: COVID-19 Business Relief Programs
Current Status: Introduced
Summary: This is a far-ranging bill that authorizes various emergency governmental programs related to economic development and business relief, including establishing a temporary business interruption stipend program to reimburse eligible businesses for business income losses caused by COVID-19-required closures. 
The bill applies to "eligible businesses," defined as a business that:
  • Was established on or before the date of enactment of any order issued by the state or any local government that required a business closure due to COVID-19.
  • Is independently owned and operated.
  • Is headquartered in Wyoming or has its principle operations located in Wyoming.
  • On March 31, 2020, had employed 50 full-time employees or less. 
An eligible business can receive a stipend if it:
  • Submits an application and the Wyoming business council (the council) approves the application. When reviewing application, the council will give preferential treatment to businesses that did not receive funding from the paycheck protection program established by the CARES Act (Pub. L. No. 116-136 (H.R. 748)).
  • Certifies that it incurred actual losses as a result of business interruptions due to a required closure.
The business interruption stipends:
  • Vary in size depending on how the number of people the business employs but will not be less than $20,000 or more than $50,000.
  • Are funded by money Wyoming receives under the federal CARES Act.