A group of Harrisburg, Pennsylvania, lawmakers are pushing legislation that would better define the language regarding clauses in business interruption insurance policies regarding civil authority so that businesses across the state aren’t left in the lurch by their insurers, according to Erie News Now.

“In this pandemic, our small businesses need to know that a lifeline they planned for is available and in reach,” said State Sen. Pam Iovino, the bill’s lead sponsor.

business closed covid 19 375x210 Lawmakers want to better define civil authority in business interruption insuranceBusiness interruption insurance is part of a business owner’s policy. It provides coverage of operating expenses like payroll and bills in the event a business must temporarily close due to a disaster. Many businesses across the country that have had to temporarily close due to government-mandated closures to stop the spread of COVID-19 have made claims on their business interruption insurance, only to get denied. Insurance companies claim that the coverage applies to disasters such as fires, in which damage to the building causes the closure of business, rather than viruses, which leave no visual signs of damage.

But that language is lacking in policies. But some businesses argue that the mere presence of the coronavirus on their tables, chairs, bars, and equipment damages property and renders establishments unsafe for guests.

Senate Bill 1127 aims to clarify the language in those policies so that businesses forced to shutter due to civil authority, such as government- or state-mandated closures, get the coverage they are entitled to so they can stay open.

“They bought this insurance, they paid for this insurance, it’s now time for that insurance to pay them because of the interruption in their business,” said Sen. Vincent Hughes, a co-sponsor of the bill. “And it’s real simple. Business interruption insurance. There’s been an interruption in their business. It’s time they get compensated by the insurance policies that they purchased.”

Beasley Allen lawyers are actively investigating and filing claims against various insurance companies for denial of business interruption coverage during the COVID-19 pandemic, and are involved in advocating for consolidation of these actions in multidistrict litigation (MDL). Dee Miles, head of our Consumer Fraud & Commercial Litigation Section, Rachel Boyd, and Paul Evans, lawyers in the Section, are spearheading this litigation for our firm and are monitoring all MDL developments as they arise. Please contact them if you have any questions or would like to discuss potential claims.

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