By Bob Katzen

Sen. Diana DiZoglio (D-Methuen) and Rep. Dylan Fernandes (D-Falmouth) have filed legislation that would require insurance companies to honor legitimate claims around business interruption insurance due to COVID-19 and get rid of the virus-exclusion clauses.

Supporters of the measure say that insurers have been denying many claims under business interruption coverage and contend that pandemics like COVID-19 are not covered by the insurance policy. Businesses argue that they are entitled to be covered under the provision “civil authority action” because it was state closure orders, not the pandemic itself, that forced their closing.

“This essential piece of legislation is crucial for protecting our small businesses, who have faced one challenge after another throughout this pandemic,” said DiZoglio. “It is unacceptable that our local mom and pop shops pay insurance claims to protect against incidents of this nature while not being permitted to access much-needed funds. Insurance companies have done just fine during this emergency—and are sitting on significant money, set aside to pay out claims like these, that our small businesses desperately need.”

“The pandemic has shuttered more than a third of small businesses across the state, devastating our local communities,” said Fernandes. “These businesses pay for business interruption insurance every year, but insurance companies have refused to cover losses related to the pandemic. Small businesses are experiencing unprecedented pain while the insurance companies that are supposed to help them are making a profit and sitting on a pile of cash. This legislation works to ensure that insurance companies do their job and provide support to our local small businesses during a time of great need.”

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