Due to a novel coronavirus causing a global health crisis, businesses are seriously struggling right now. The temporary shut-down of our economy to prevent the spread of COVID-19 has wreaked havoc on businesses large and small – I hear it every day from business owners and employees in my district. To confront the most daunting economic challenge of our time, we need to put in place every available option to provide safety nets and recovery tools to support our businesses and our economy. That is why I have introduced bipartisan legislation to avail Pennsylvania business owners with business interruption insurance coverage in their policies with an avenue to submit claims during the COVID-19 pandemic.
Federal programs such as the Paycheck Protection Program, and state ones such as the COVID-19 Working Capital Access Program, have been a much-needed resource for some businesses to help weather this storm. But as we’ve seen with both these programs, they do not meet or cover all the needs businesses are experiencing. More assistance is required to help struggling businesses survive, which is the ultimate goal of any assistance and recovery program. Businesses are making decisions about their survivability and I want them to have the fullest range of options to evaluate that critical decision. The ability to file and collect on legitimate business interruption claims is an option that policyholders should have. Businesses that have consistently paid their business interruption insurance premiums expect their insurance coverage to provide security during a time of need, such as now. Unfortunately, ambiguous insurance policy language is currently preventing many Pennsylvania businesses from collecting payment from their insurers.
My legislation is designed to clarify and specifically benefit businesses with business interruption coverage that contain “civil authority clauses,” which typically allow claims if the government shuts down a business during a natural disaster. Recently, the Pennsylvania Supreme Court has characterized our current situation as a “natural disaster and a catastrophe of massive proportions.” It also clarifies that the presence of COVID-19 in a community constitutes “property damage.”
Successful passage and enactment of this legislation would provide an avenue for more businesses to submit claims on their business interruption insurance policies and help prevent them from being forced to close their doors.
In an effort to craft legislation that can withstand a constitutional challenge, the legislation is limited in scope so as not to re-write existing insurance contracts. Under this legislation, businesses would not receive additional payment beyond what their existing coverage permits. Insurance companies would not be mandated to immediately pay claims – the normal claims review process would take place before any payments are made. And businesses that have clauses in their policies that explicitly exempt viruses would not be eligible to collect payment from their insurers.
I believe that this legislation would serve as a lifeline for many struggling businesses. In times like these, every legitimate lifeline must be available. Knowing which safety net options are there will be critical to the decisions that will be made over the coming months by businesses. The bill’s bipartisan support is a positive indication that there is understanding that this legislation is one of the ways we can support Pennsylvania’s economy.
It is hard to believe that it was just mid-February when my Robinson Township district office was formally inducted as a member of the Pittsburgh Airport Area Chamber of Commerce. So much has changed since then. But in the midst of this unprecedented crisis, my commitment to supporting the businesses of the 37th Senatorial District and our Commonwealth is stronger than ever before.
My offices’ physical locations are closed for reasons of health and safety, however we continue to serve constituents via phone and email. If I can be of any assistance to you in navigating these uncertain times, please do not hesitate to contact me at firstname.lastname@example.org or (412) 788-2967.
State Sen. Pam Iovino represents Pennsylvania’s 37th Senatorial District. Her Robinson Township district office is located at 5996 Steubenville Pike.