Following in the footsteps of New Jersey, the states of Ohio and Massachusetts have filed proposed legislation that could result in small businesses qualifying for business interruption coverage from their insurance policies. The New Jersey Legislation, which has faced strong opposition from the insurance lobby, was focused on compelling insurance companies to cover claims by small business owners for damages resulting from COVID-19 up to the limits of their policies.
Today, Ohio and Massachusetts have filed very similar bills with their respective legislation. The Ohio legislation (HB 589) is focused on protecting small businesses located in Ohio, which had business interruption insurance in their current policies. It compels insurance companies to cover claims by small business owners for damages resulting from COVID-19 up to the limits of their policies.
The proposed legislation requires that COVID-19 be considered a “covered peril” and removes the exemption of virus which can be found in many commercial property insurance policies.
As we stated in our previous post many commercial policies require that there be a "direct physical loss or damage" by a Covered Cause of Loss at the insured premises to trigger coverage. In addition, many commercial policies have an exclusion for loss caused by virus, bacteria, etc. In response, the legislatures of Ohio and Massachusetts are proposing legislation that would "require insurers offering business interruption insurance to cover losses attributable to viruses and pandemics and to declare an emergency." The legislation would apply to businesses in Ohio with 100 or fewer employees.
Many business owners have been hearing that the financial losses they incur during this pandemic are not being covered by their BI insurance. This new legislation could allow COVID-19 to be the trigger for Business Interruption coverage under their policy.
As this continues to flow through legal channels, we will share insights and changes as they become available. If you are interested in reading more on the topic here is a good resource covering the Ohio bill. If you have questions about your own financial losses and whether your commercial Business Interruption coverage would afford you protection, please reach out to the claim solution experts at Sill Company.
Our team is here to help you understand your coverage, the changing regulations and maximize your claim recovery. Contact our team today for more information regarding your coverage.