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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session


Posted: December 2, 2020 02:28 PM
From: Senator Vincent J. Hughes and Sen. Katie J. Muth
To: All Senate members
Subject: Business Interruption Insurance
In the near future, we will be reintroducing Senate Bill 1114, from the previous legislative session, to address the concerns Pennsylvania businesses are still facing regarding the business interruption provisions of their business insurance policies.

Most, if not all, business insurance policies include business interruption coverage, but it has been brought to our attention that many businesses have had their claims denied because of so-called “virus exclusions.” These businesses have paid their policy premiums year after year believing they would be covered. Now, during this unprecedented COVID-19 pandemic, insurance companies are continuing to reject claims and telling businesses their damages and losses will not be covered. These businesses, both large and small, employ millions of people in the Commonwealth. In fact, prior to COVID-19, there were 1.1 million small businesses that employed more than 2.5 million people. However, because of COVID-19, businesses are shuttering and people are losing their livelihood, especially in the restaurant and hospitality industry. Enabling businesses to make claims for their losses and damages will help businesses stay open, keep citizens employed, and provide stability to our struggling economy.

Our legislation would permit insured businesses to make claims for losses or damage as a direct result of COVID-19, and for losses related to the closure of businesses and the Governor’s efforts to mitigate the spread of COVID-19 throughout the Commonwealth. The legislation would apply to losses and damages experienced under active policies as of the date of the declared emergency. Under the legislation, small businesses would receive 100% of their policy limits, and large businesses would receive 75% of their policy limits. Furthermore, the legislation would preempt litigation between insurance companies and policy holders regarding whether the language in their policy excludes COVID-19 related losses.

Helping businesses stay open and keeping the hard-working citizens of this Commonwealth employed will be vital in our ability to weather this crisis and ensure the economic stability of our Commonwealth. We hope you will join us in cosponsoring this legislation.

If you have any questions please, contact either of our offices.

Introduced as SB42