Lawmakers in Washington have introduced a bill that would help small businesses that want to recover COVID-19-related claims under insurance cancellations.
SB. 5351 would codify certain protections extended by recent court decisions in favor of policyholders.
The Washington proposal would also give small businesses another year to question insurers' denial of COVID-19 business interruptions, beyond the current one-year limit
In a statement Wednesday, insurance groups said they strongly oppose SB. 5351 and that mandatory retroactive coverage for business interruptions may undermine the state's economic recovery. The United States Constitution, as well as the Washington State Constitution, "the American Property Casualty Insurance Association, the National Association of Mutual Insurance Companies, and the Northwest Insurance Council said in the statement.
introduce bills that would force insurers to retroactively cover business interruptions due to COVID-1
The text of SB 5351 states that many of the small businesses in Washington ordered to cease or restrict operations during the state of emergency declared by the governor on 29 February 2020. , "Insurances that cover cover to compensate for lost income due to loss of or damage
" Insurers, however, deny claims under these insurances and argue that "loss" and "damage" are synonymous and that no claims are earned without to show actual physical damage to the premises, "SB. 5351 States.
The state of Washington and federal courts have recently examined this issue and have "clearly and unequivocally" established that the words "loss" and "damage" have different meanings under Washington law in connection with insurance cancellations and should not be interpreted to give a word, the bill says .
"The legislator intends to codify this interpretation in order to provide greater clarity", according to the bill.
"Courts in our state have recently ruled that insurance companies should not be allowed to deny legitimate claims based on a strained reading of the policy language," Washington Democratic Senator David Frockt, a co-sponsor of the bill, said in a statement.
The bill was read and referred to the Committee on Business, Financial Services and Trade.
More insurance and risk management news on the coronavirus crisis here .