Reps. Thompson, Huffman ask state to pressure insurers over coronavirus-related claims by businesses

U.S. Reps. Mike Thompson and Jared Huffman, along with 31 other California colleagues, on Tuesday wrote to state Insurance Commissioner Ricardo Lara and asked him to use his office’s authority to ensure commercial insurance companies comply with their business interruption policies regarding claims related to losses from the coronavirus.

The lawmakers’ call to action comes after insurers have been denying claims by small businesses by citing that a pandemic and a virus such as COVID-19 are not covered under most business interruption policies.

Lara last week asked insurance companies to submit data to his office regarding how they are handling virus-related claims by businesses under their business interruption policies. It’s expected that many, if not all, commercial insurers will assert that the coronavirus pandemic is excluded from typical business interruption coverage.

“The coronavirus poses significant challenges to many small businesses and we are urging you to exercise all authority to have insurance companies comply with their business interruption insurance to cover losses caused by a California statewide business shutdown ordered to prevent the spread of coronavirus,” the lawmakers wrote to the state insurance commissioner.

Bill Swindell