Business Interruption Legislation

Bills are pending throughout the country that would require insurers to pay for coverage that was never sold and would have far-reaching, significant negative impacts to all consumers and businesses relying on the insurance market to protect them now and in the future. These bills attempt to change every insurance policy issued for loss of use and occupancy and business interruption so that each policy would effectively be rewritten to include coverage for business interruption during the declared state emergency due to the COVID-19 pandemic and mandate insurance policy interpretation regardless of the clear wording of the policy itself, providing a coverage never intended when the policy was underwritten and priced. Consistent with our WSIA policy positions on state and federal COVID-19-related legislative and regulatory advocacy, WSIA submits testimony in opposition to all proposals and is tracking all anti-contractual insurance coverage legislation that has been filed in a state or Congress. All legislation and WSIA’s opposition letters are available below. States without information may have ongoing discussions but no legislation has been filed. This list was last updated on July 10, 2020.

Visit WSIA’s State COVID-19 Bulletins page for a comprehensive list of state notices and bulletins on accommodations for regulatory requirements, and any other guidance relevant to surplus lines brokers or nonadmitted carriers.

Federal Activity

Business Interruption Insurance Coverage Act (H.R. 6494)

  • Filed April 14 by Rep. Mike Thompson (D-CA), who represents CA District 5, which includes Napa and is home to one of the restaurant owners leading this movement.
  • The bill would require each insurer that offers or makes available business interruption coverage to cover losses resulting from pandemics, forced closures or power shutdowns. It would also preempt existing exclusions.
  • The bill was filed with nine cosponsors, but sources are indicating some are withdrawing their support. There is no Senate companion bill. We also note that neither this bill nor its underlying intent were made part of the House Financial Services Committee Majority’s Memorandum announcement to its members outlining their priorities for COVID-19 proposals.

    Never Again Small Business Protection Act of 2020 (H.R. 6497)

    • Filed April 14 by Rep. Brian Fitzpatrick (R-PA) with four cosponsors.
    • The bill would require insurers that offer or make available any business interruption coverage to provide for coverage of losses resulting from interruption of business operations during any declared local, state or federal national emergency. It would require the Department of Treasury to conduct a study on the effectiveness of a federal backstop for excessive losses for insurers and the report would trigger if the legislation becomes effective.

    The Business Interruption Relief Act of 2020 (H.R.7412)

    • Filed June 30 by Rep. Mike Thompson (D-CA) with no cosponsors. 
    • The bill would establish a fund to reimburse insurers that voluntarily pay claims for business interruption coverage to certain eligible businesses. The claims must be to those with (a) business interruption insurance that (b) includes civil authority shutdowns but (c) excludes virus-related damages. 

    State Activity

     AK  AL  AR AZ  CA  CO  CT  DC  DE  FL  GA  HI  IA ID  IL  IN  KS KY  LA  MA  MD  ME  MI MN  MO  MS
     MT  NC  ND  NE NH  NJ  NM  NV  NY  OH  OK  OR  PA  RI  SC  SD  TN  TX  UT  VA  VT  WA  WI  WV  WY

    California

    • Legislation: AB 1552
      • AB 1522, which was initially introduced as an appropriations bill for Native American studies, was amended to include rebuttable presumptions that COVID-19 was present on specified property and caused physical damage to that property which was the direct cause of the business interruption. The bill has been re-referred to the Assembly Insurance Committee where WSIA expects it to be defeated and will submit testimony in opposition at the appropriate time. 

    District of Columbia

    • Legislation: Coronavirus Omnibus Emergency Amendment Act of 2020 and Coronavirus Omnibus Temporary Amendment Act of 2020
      • The bill was filed on Friday, May 1 in the D.C. Council and intended to serve as a means to infuse immediate assistance to small businesses in D.C. and was scheduled for hearing on Tuesday, May 5 as Emergency and Temporary measures without public input or discussion. As proposed, Section 2 of the bill would require insurers to pay business interruption claims for policies containing the coverage, retroactively and regardless of exclusions. Initially, sources indicated the bill had board support and would pass at the May 5 hearing.
      • WSIA is participating in a coalition organized by the D.C. Insurance Federation (DCIF) with a broad group of insurance trade associations to voice our significant opposition to Section 2 outlined in the comment letters below.
      • During the May 5 Council meeting, several members of the Council expressed significant concerns regarding the legality and constitutionality of the provision as well as unintended consequences and impact on the industry's broader ability continue to provide all coverages to D.C. consumers, while other Council members indicated full support for the provision. After discussion, the provision was pulled from the bill for further analysis and discussion.
      • WSIA participated in discussions with the industry coalition and individual council members after the hearing and has learned that the Council does not plan to reconsider the retroactive business interruption provision in the near future. 
    • Joint insurance trade associations letter of opposition filed May 5, 2020
    • Congressional letter of opposition filed May 4, 2020
    • WSIA letter of opposition filed April 30, 2020

    Louisiana

    • Legislation: HB 858 and SB 477
      • On March 31, the Louisiana Legislature suspended the legislative session indefinitely, but on May 5, the legislature came back into session to meet until June 1 with focus on necessary actions. 
      • Hearings on the bills were scheduled for May 6 and May 13 where the bills were amended to remove any retroactive business interruption provisions. 
      • SB 477 now includes a mandatory notice of all exclusions on a form prescribed by the commissioner on all insurance covering business interruption in the state. 
      • WSIA continues to work closely with the Louisiana Surplus Lines Association to oppose the mandatory notice. 
    • WSIA letter of opposition filed with the House Insurance Committee prior to HB 858 hearing May 6, 2020
    • WSIA letter of opposition filed with the Senate Insurance Committee prior to SB 477 Hearing May 6, 2020
    • WSIA letter of opposition filed April 13, 2020
    • WSIA letter of opposition filed April 13, 2020 

    Massachusetts

    • Legislation: SD 2888 and SB 2655
      • Our sources in MA are suggesting this bill does not have significant support and is unlikely to move forward. However, we do have strong local representation there from our work with the CIAB in 2018 to reform home state taxation. Should this bill get any traction, we can quickly engage the same local representation.
      • An informational hearing was held on SB 2655 by the Joint Committee on Financial Services on May 21. 
    • WSIA letter of opposition filed May 20, 2020 for the informational hearing held by the Joint Committee on Financial Services
    • WSIA letter of opposition filed April 13, 2020
    • WSIA letter of opposition filed April 13, 2020

    Michigan

    • Legislation: HB 5739
      • Our sources in MI suggest this bill does not have significant support but given the state’s economic situation, this bill will be closely monitored. WSIA has strong local connections and lobbyists to engage when appropriate. 
    • WSIA letter of opposition filed April 27, 2020

    New Jersey

    • Legislation: A 3844
      • There is no companion bill filed in the New Jersey Senate and we are hearing there that legislative and regulatory leaders have not offered their support. If anything changes, we will work with the New Jersey Surplus Lines Association to quickly engage local representation.
    • WSIA letter of opposition filed April 13, 2020

    New York

    • Legislation: A 10226S 8178S 8211AA 10327 (specific to human services and community-based health providers) and A 10226B
      • We are working closely with the Excess Line Association of New York (ELANY) to oppose this legislation and we believe these bills do not have support from the Department of Financial Services (DFS) or the Governor's office. 
    • WSIA and ELANY letter of opposition filed April 3, 2020

    Ohio

    • Legislation: HB 589
      • The Ohio Legislature suspended its legislative session indefinitely and therefore is not currently meeting or able to vote on pending legislative proposals. Sources suggest this bill does not have support to move forward.
    • WSIA letter of opposition filed April 13, 2020
    • WSIA letter of opposition filed April 13, 2020

    Pennsylvania

    Rhode Island

    • Legislation: HB 8079 and HB 8064
      • WSIA currently has no indication that either bill will move through committee but is working with local stakeholders and national trade associations to oppose the legislation.
    • WSIA letter of opposition filed July 10, 2020

    South Carolina

    • Legislation: S 1188
      • On March 23, the South Carolina legislature suspended its legislative session indefinitely and therefore is not currently meeting or able to vote on pending legislative proposals.
      • Sources tell us this bill has no support from legislative leadership and we note that the Commissioner included the following statement on the Department’s website synopsis of Business Interruption Coverage: “Please note that the South Carolina Department of Insurance does not have the authority to require insurers to extend coverage under the policy where specifically excluded or to sell this type of coverage to consumers.”
    • WSIA letter of opposition filed April 13, 2020
    • Joint industry letter of opposition filed April 24, 2020

    Comments from WSIA

    • May 19 – Comments to House of Representatives Committee on Small Business Subcommittee on Innovation and Workforce Development. Outlines WSIA’s concerns with proposals that would implement retroactive insurance coverage and interfere with legal contracts. Comments were submitted to each member in advance of a May 21 virtual forum, “Business Interruption Coverage: Are Policyholders being Left Behind?
    • April 17 - WSIA letter to NAIC
    • April 16 - WSIA letter to NCOIL

    Comments and Letters from Members of Congress

    • May 1 - Comments  from Democratic House of Representatives leadership on continuing concerns with measures seeking to implement retroactive business interruption coverage.
    • April 30 - Comments from Rep. Wm. Lacy Clay (D-MO) and Rep. Steve Stivers (R-OH) reiterating concerns with legislative actions on Business Interruption coverage that unnecessarily and illegally retroactively interfere with the insurance contract. 
    • April 17 - Comments from Rep. Ted Budd (R-NC) and other members of the House outlining concerns with any measures that would retroactively impact valid insurance contracts which interfere with existing contract and constitutional law.
    • April 16 - Comments from Rep. Steve Stivers (R-OH) and nearly the entire minority membership of the House Financial Services Committee to President Trump opposing retroactive measures to interfere with valid insurance contracts support for the state insurance regulatory activity protecting policyholders.
    • April 10 - Letter from the Senate Banking Committee to President Trump in support of maintaining insurance contracts without federal interference. This letter was sent in response to his April 10 press briefing where he spoke on the topic on business interruption coverage in insurance policies and called for fairness under the terms of existing policies. He did not call for retroactive coverage. Where a policy includes BI coverage triggered under the circumstances, we all agree with the President that those claims should be paid.

    Responses to Members of Congress from Department of Treasury

    • May 8 - Comments from the Department of the Treasury to Rep. Ted BuddRep. Steve Stivers and Sen. Tim Scott, agreeing with their concerns with retroactive Business Interruption coverage proposals and the potential negative impact on the stability of the insurance industry.

    Comments and Letters from Regulatory and Legislative Entities

    International Association of Insurance Supervisors (IAIS)

    • May 7 - Comments from IAIS cautioning against measures seeking to require insurers to retroactively cover COVID-19 related losses.

    National Association of Insurance Commissioners (NAIC)

    • May 20 – Letter from NAIC to members of the House Financial Services Committee on Small Business Subcommittee on Innovation and Workforce Development outlining concerns for solvency of the insurance market if retroactive measurers are implemented in certain insurance contracts.
    • March 25 - Statements from NAIC on Congressional Action Relating to COVID-19.

    National Conference of State Insurance Legislators (NCOIL)

    • March 25 - Letter from the NCOIL to Members of Congress, in opposition to retroactive business interruption proposals.

    State Attorneys General

    • May 18 – Letter from seven state Attorneys General to President Trump expressing concern with any federal action that may expand insurance company liability beyond the plain terms of the policies. Participating states included Alabama, Alaska, Indiana, Nebraska, Oklahoma, South Carolina and Texas.