- On April 16, 2020
The battle of coverage for business interruption coverage related to COIVD-19 is heating up – and it’s clear carriers don’t know how to respond to the massive influx of claims. Lawsuits filed last month against carriers have prevented lawmakers from putting this topic on the backburner but a decision on business interruption coverage for COVID-19 likely won’t be reached for a few more weeks.
Regardless of the current situation, one thing is certain: insurance carriers cannot ignore claims that are legitimately filed and rules still apply.
A recent notice posted by California’s Insurance Commissioner, Ricardo Lara highlights some of the issues policyholders are already facing: a lack of proper investigation on valid claims. The notice was prompted by the numerous complaints from businesses, public businesses, and other stakeholders about certain insurers, agents, brokers, and insurance company representatives are “attempting to dissuade policyholders from filing a notice of claim, or refusing to open and investigate these claims”. Read the full notice here.
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California’s Insurance Commissioner, Ricardo Lara, issued a notice this week that all agents, brokers, insurance companies, and other licenses to accept, forward, acknowledge and fairly investigate ALL business interruption insurance claims submitted by businesses.
In addition, any claim denied must communicate to the policyholder why it was denied and provide legal and factual bases for the denial. Denials must include where in reference to and provide an explanation of the statute, applicable law, or policy provision, condition, or exclusion to the claim.
This notice comes at an important time for many businesses and should serve as a cautionary tale to policyholders to watch for signs of bad faith practices by insurance companies. It’s more important than ever to know what your policy includes and to file a claim if you are experiencing losses related to COVID-19.