Louisiana business interruption bill may change coverage due to COVID-19

Business interruption insurance - COVID-19 Test
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Legislators are reviewing the bill to decide if insurers should be forced to pay pandemic claims.

Legislators in Louisiana are reviewing a business interruption insurance bill. It may require insurers with operations within the state to have to cover claims connected to the coronavirus pandemic.

The legislature recently went into session following about 2 months of suspended work due to COVID-19.

Both the House and the Senate will need to complete as much as they can by June 1, 2020. The delay they’ve already faced over the last two months have put bills on hold that may have passed earlier in 2020. That said, it also brought about a number of new bills related to the pandemic. Among them is House Bill 858, which could alter business interruption insurance claim requirements.

Rep. Royce Duplessis introduced the bill which would require insurers operating in Louisiana to retroactively provide coverage for these claims due to the outbreak as of March 11, 2020. The bill would be applicable to businesses with policies and fewer than 100 full-time employees. An additional Senate bill would also require health insurers to alter their coverage to include COVID-19 testing.

The business interruption insurance bill and the health coverage are not unique to Louisiana.

Though Louisiana may be reviewing bills regarding this type of coverage at the moment, it is far from the only state to do so. Other comparable forms of legislation have also been written and presented in other states across the country. Among those currently working on their own versions include Massachusetts, New Jersey, New York and Ohio.

The bills are not without their critics and opposition. Opponents of HB 858 have claimed that it would be “unconstitutional” to pass this type of legislation. They have also cautioned that requiring insurers to provide this type of retroactive coverage would leave the industry in financial catastrophe.

Business interruption insurance provides companies with coverage in case unforeseen circumstances cause them to temporarily shut down and face losses as a result. That said, Business interruption insurance - COVID-19 Testmost standard policy language does not specifically include pandemics among the forms of covered reasons for a stoppage in operations.

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