The bill is meant to provide improved transparency in regard to this commercial coverage.
Louisiana’s state Senate has advanced a business interruption insurance bill to provide greater transparency with this type of coverage.
Over several weeks, many companies were surprised to discover their coverage didn’t cover pandemics.
Senator Rick Ward (R-Port Allen) informed his colleagues that the dismay due to the lack of transparency in business interruption insurance was all too commonplace. The bill was introduced to try to improve the clarity of a policy’s coverage.
Insurers have responded by pointing to the fine print of their policies. Those details state that the insurance companies are not required to provide payouts in the event that business is unexpectedly shut down by a virus.
Ward put forward Senate Bill 477 to prevent policyholders from finding themselves surprised and dismayed in this way in the future. SB477 would make it a requirement for policies to provide a list of all exclusions in advance of enrollment. Those exclusions would list all the ways in which an insurer will not be covering losses. Upon enrollment or renewal, a policyholder would be required to acknowledge having read and understood the list of exclusions.
The Louisiana Senate approved SB477 for business interruption insurance clarity this week.
The Senate approved the bill 31 to 4. SB477 is now headed to a House committee for consideration. Ward compared this proposal to a similar one that had already passed regarding auto insurance. This had to do with drivers who didn’t want the component that provides coverage for accidents involving uninsured motorists.
When that law passed, policyholders who did not want to have that coverage added to their policy were required to sign an acknowledgement of that fact. That way, they weren’t left under the impression that they had it when this was not the case.
Ward stated that under SB477, the insurance commissioner would need to prepare a form that would list all the exclusions that could remain uncovered in business interruption insurance policies. If this bill should successfully become law, it will become effective as of January 1, 2021.