Politicians in Washington D.C. are starting to take notice of business owner frustrations with their insurance companies re: business interruption claims.
Given the magnitude of losses, impacts to the economy, and property-casualty insurers' surplus exceeding $800 billion, expect to see a lot more scrutiny on this issue.
One U.S. Representative asked insurance companies to provide: (1) "by April 21 the language of any provision used to deny claims filed for 'business income' and related coverages, and (2) "the number of acceptances and denials, and profit figures, from such coverages."
Insurers are starting to take heat in Washington, D.C., over denials of claims for business income losses tied to government-ordered shutdowns. In a letter Monday viewed by The Wall Street Journal, U.S. Rep. Pramila Jayapal (D., Wash.) asked insurance chief executives to justify refusals to pay out on “business interruption” and related coverages in policies held by small and midsize businesses. President Trump said on Friday that restaurateurs told him they paid for business-interruption coverage for decades and “they’ve never needed it. All of a sudden they need it” and their insurers “don’t want to pay up.” Increasingly desperate small businesses hurt by the spread of the novel coronavirus are seeking help wherever they can find it, filing claims totaling potentially hundreds of billions of dollars.