Bipartisan legislation recently introduced in the Senate would help Pennsylvania businesses receive payment for business interruption insurance claims filed during the COVID-19 pandemic.
The bill clarifies the ambiguous insurance policy language that has prevented many businesses from collecting payment from their insurers. Clarification would ensure insurers pay meritorious business interruption claims quickly, potentially preventing a business from going out of business.
Businesses would be unable to receive additional payment beyond what their existing coverage permits.
“I have heard from numerous small business owners who have consistently paid their insurance premiums yet are seeing their claims rejected during what the Pennsylvania Supreme Court has called a ‘natural disaster and a catastrophe of massive proportions,’” Sen. Pam Iovino (D-Allegheny and Washington counties), who introduced the bill, said. “This legislation is not intended to re-write current insurance policies; we simply want to clarify Pennsylvania law regarding the interpretation of the ambiguous insurance policy wording that is preventing businesses from collecting on claims and keeping their heads above water. Businesses should be allowed to focus on retaining employees on the payroll and surviving these turbulent times, not entering costly and potentially multi-year litigation to appeal their insurers’ denial.”
The bill was modeled off an Oregon statute that withstood a legal challenge to its constitutionality.