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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session


Posted: April 9, 2020 11:11 AM
From: Senator Andrew E. Dinniman and Sen. Lisa M. Boscola
To: All Senate members
Subject: Business Disruption Insurance During COVID-19

 The legislation I am proposing is based on legislation currently in the Joint Rules Committee of the Massachusetts Legislature. In Massachusetts, the bill concerns restaurants. My legislation is for all small businesses. In 2006, the insurance industry began to add amendments to business disruption policies that eliminated claims due to losses based on viruses or bacteria. Under the legislation I propose, insurers would be required to cover COVID-19 losses for holders of business disruption insurance plans up to the policy limits.  The bill would be limited to small businesses of 100 or less employees.  Insurers would pay out the claims of business disruption based on COVID-19 but would be reimbursed by the Commonwealth. Over the next several years, the Commonwealth would impose a surcharge on insurers licensed in Pennsylvania to pay back the Commonwealth. In essence, the insurance industry would become part of the conduit for a government stimulus that can deliver quickly payouts to those who have purchased business disruption insurance.

This bill provides a vehicle for rapid delivery of stimulus dollars.   The Commonwealth will get its money back through future surcharges on licensed insurers.  The specific types of small businesses to be covered and the number of employees that would determine a small business that would be covered can change on this bill as the bill goes through the Insurance Committee and the full Senate. 

I hope you will sign on to this piece of legislation and help our small businesses who are in a very difficult situation.