As the COVID-19 pandemic continues to have significant economic consequences in the US, a key issue for insurers and businesses throughout the country will be whether all or a portion of losses may be covered by insurance. Because many commercial insurance policies do not provide business interruption coverage for losses occasioned by COVID-19 related shutdowns, legislative and regulatory pressure on insurers to pay business interruption losses despite what their policies say will continue, as well as litigation seeking to determine if coverage exists under such policies.
The insurance industry has made its position clear: standard businessowners, commercial property and commercial package policies do not cover business interruption losses caused by COVID-19. The threat to the industry has been made equally clear: the American Property Casualty Insurance Association (APCIA) has estimated that closure losses for small businesses with fewer than 100 employees are between $255 billion to $431 billion per month, an amount which exceeds the relevant monthly commercial property insurance premiums by a factor of 50 to 100 and compares to total surplus for all US home, auto and business insurers of $800 billion.1 Similarly, AM Best has concluded that legislation that forces insurers to pay COVID-19 related business interruption losses that are not currently covered would deplete the insurance industry’s capital and surplus and very likely lead to widespread insolvencies.2 Clearly, widespread adverse court rulings that find coverage where none was intended could have similarly severe effects. S&P currently maintains a stable outlook on the U.S property/casualty insurance sector premised on existing coverage and its belief that state efforts to impose retroactive liability for business interruption would largely be unsuccessful unless the government provides insurers with resources to meet such obligations.3
This alert provides an overview of business interruption coverages, the kinds of business interruption claims that are being made arising from COVID-19 and ongoing legislative activity.
Standard commercial property insurance policies typically include one or more “time element” coverages that protect insureds against reduced earnings and increased expenses because of damage to the property they use to conduct business or, in the case of contingent time element coverages, the property of others on whom they may depend. The purpose of such insurance is to put insureds in substantially the same financial position they would be in if the property damage had not occurred. These coverages are called “time element” because the severity of loss depends on the length of the interruption in normal business operations.
- Business income: This insurance covers lost business income when the insured property suffers direct physical loss or damage from a covered cause of loss resulting in a necessary interruption of the insured’s business. It typically pays net profits that the insured would have earned absent a suspension of operations and normal operating costs that the insured still incurs while operations are suspended.
The physical loss or damage must be to covered property and must result from a covered peril. Courts are split as to whether this coverage may apply where buildings have become uninhabitable or nonoperational because of contamination, including from airborne contaminants. Even under the reasoning in the decisions where courts found coverage, however, the contaminant was already on the physical premises of the business. Losses resulting from reduced business due to fears of future impending contamination from a virus would likely not be not covered.
- Extra Expense: This insurance covers the costs associated with arranging, equipping and operating out of temporary quarters due to property damage at the insured’s premises. As with business income insurance, a key requirement for coverage is physical damage to covered property from a covered cause of loss.
- Contingent business income and extra expense: This extends coverage to business income losses resulting from an interruption of the insured’s business and extra expense due to property damage suffered by a key supplier or customer. Thus, for this coverage, the insured is not required to suffer direct property damage. Rather, the insurance is typically triggered if the supplier or customer suffers damage of the type covered under the policy, provided that such damage resulted from a covered cause of loss.
- Civil authority: This extends coverage to losses resulting from an interruption of the insured’s business when actions by local, state or federal authorities in response to damage to property other than the insured’s property prohibit access to the insured’s property. As with contingent business income, the insured is not required to suffer direct property damage, but again the damage must result from a covered cause of loss.
- Ingress/Egress: This extends coverage to losses resulting from an interruption of the insured’s business when physical access to the insured’s premises is physically hindered by property damage resulting from a covered cause of loss, irrespective of whether the damaged property is covered by the policy.
Even when business income or extra expense losses result from damage to covered property, the property damage still must be caused by a covered peril or otherwise not excluded. Many commercial property policies exclude losses caused by viruses or infectious agents. An ISO exclusion for “loss due to virus or bacteria” is attached to many standard commercial policies and expressly excludes "loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease." Therefore, even if damage to covered property is determined to have occurred, this endorsement will most likely exclude business interruption losses due to the coronavirus.
Dozens of individual and class actions suits have been filed by businesses in different parts of the country seeking coverage for their financial losses resulting from the pandemic. In light of the amounts at stake and number of businesses impacted by the pandemic, we expect many more are likely to be filed, potentially in every state.
The proprietors of Oceana Grill, a New Orleans-based restaurant located in the French Quarter, were among the first to sue. On March 16 they filed a petition in Louisiana state court seeking a declaratory judgment that their business interruption coverage would cover COVID-19-related damages. The petition asserts that contamination by the coronavirus “would be a direct physical loss” requiring remediation to clean the surfaces of the establishment, and notes that the applicable policy does not include an exclusion for losses from a virus or global pandemic. It also asks the court for a declaratory judgment that a Civil Authority Order by Louisiana Governor John Edwards banning gatherings of 250 or more people in a single space and restrictions on restaurants issued by the Mayor of New Orleans trigger the civil authority provision of the policy. Cajun Conti LLC et al. v. Certain Underwriters at Lloyd’s, London et al., No. 2020-02558 (La. Dist. Ct., Orleans Parish, Mar. 16, 2020).
Since then, a number of similar single-plaintiff and proposed class action lawsuits have been filed. For example, on March 25, in California, the owner of several Michelin-starred restaurants, including The French Laundry in Napa Valley, filed a similar complaint, alleging that his insurer owes coverage for both business interruption and property damage claims. French Laundry Partners, LP dba The French Laundry v. Hartford Fire Ins. Co., (Cal. Superior Ct. Cnty. of Napa, Mar. 25, 2020).
New Orleans-based law firm Gauthier Murphy & Houghtaling LLC, which represents both the proprietors of the Oceana Grill and The French Laundry in their lawsuits, has formed a non-profit coalition of interested parties called the Business Interruption Group with the purpose of demanding payment for restaurants that have business interruption insurance and do not have virus exclusions in their policies. The group’s website (https://werbig.org/) states that the group’s intention is to bring legal action in every state if insurers do not start paying insurance business claims, and declares its support for federal subsidiaries for insurers that pay business interruption losses caused by the coronavirus. According to the website, founding members of the group include celebrity chefs Thomas Keller, Wolfgang Puck, Daniel Boulud, and Jean-Georges Vongerichten.
On April 9, two Miami-based restaurants filed a putative national class action complaint, seeking a declaratory judgment and alleging an anticipatory breach of contract claim. The plaintiffs seek a declaration that “the COVID-19 pandemic and the corresponding response by civil authorities to stop the spread of the outbreak triggers coverage, has caused physical property loss and damage to the insured property, provides coverage for future civil authority orders that result in future suspensions or curtailments of business operations.” El Novillo Restaurant, et al. v. Certain Underwriters at Lloyd’s, London et al., No. 1:20-cv-21525-UU (S.D. Fla. Apr. 9, 2020). The complaint does not address the ISO policy exclusion in the plaintiffs’ policy. Interestingly, the complaint mentions the pending state legislative proposals described below.
On April 20, a national putative class action complaint was filed by a Fort Lauderdale-based restaurant against Westchester Surplus Lines Insurance Company and its parent, Chubb Limited. The plaintiff, represented by Boies Schiller, alleges that the “stay-at-home” orders issued by the Florida Governor “were issued in response to dangerous physical conditions and caused a suspension of business operations on the covered premises.”The plaintiff brings claims for declaratory judgment and breach of contract as to each of three provisions in its policy: the business income coverage, extra expense coverage, and civil authority coverage. Notably, the plaintiff alleges that its policy did not include the ISO virus exclusion discussed above.
On April 29, Joseph Tambellini, Inc. dba Joseph Tambellini Restaurantfiled an Emergency Application with the Pennsylvania Supreme Court requesting the Court to assume jurisdiction over a lawsuit it filed in the Court of Common Pleas, Alleghany County. In that suit, Tambellini is seeking a declaratory judgment that it is covered under an “all risks” policy for business interruption, extra expense, contamination and civil authority due to COVID-19 and government shut-down orders. The Emergency Application requests the Court to establish an expedited schedule for briefing and oral argument before the Court and assume jurisdiction over all COVID-19 insurance coverage lawsuits in Pennsylvania for the purpose of creating a process for those cases to be heard in one trial court and a system for the expeditious resolution of all legal insurance coverage issues that arise because of COVID-19. In support, the plaintiff asserts that insurance issues presented by its lawsuit are of immediate importance to all Pennsylvania citizens and will eventually be presented to the Court for final resolution, and that delay in a final resolution will prejudice the plaintiffs and all citizens of the state whose coverage is denied.
Similar efforts to consolidate cases in state and federal courts are likely on the horizon, as the number of overall cases continues to rise.
Several states have issued data calls requesting information on business interruption coverage that property/casualty insurers write in their state.
On May 1, the National Association of Insurance Commissioners (NAIC) announced that it will be coordinating data calls on behalf of insurance regulators in 50 states, the District of Columbia and the U.S. territories. The data calls will have two components: a one-time report of business interruption premium and exposure information due May 22, 2020 and a monthly report with COVID-19 claims and report first due June 15, 2020. Individual company letters are expected to be sent May 8. The information is required to be submitted directly to the NAIC through the NAIC’s Regulatory Data Collection (RDC) application.
The NAIC’s data call requires reporting on a group basis with separate reporting for Business Owners Policies (BOP) and all other policies that include business interruption coverage (including commercial multiperil policies). For premiums and exposures, it requires a break-out for small, medium and large businesses (defined by number of employees) and asks for premiums, the number of inforce policies, the percentage of policies with a physical loss requirement and percentage of policies with a virus exclusion. For the claims and loss report, it requires reporting of the number of COVID-19 related reported claims, the number of closed claims with and without payment, and paid and incurred losses. The instructions and reporting forms can be found here.
New York. As reported in our prior Legal Alert, on March 10, the New York Department of Financial Services (DFS) directed all property/casualty insurers authorized in New York to provide policyholders under commercial property policies with an explanation of benefits under their policies and the protections provided in connection with COVID-19. The explanation would include information about the covered perils under the policy, whether contamination related to a pandemic may constitute physical damage or loss for purposes of business interruption cover, and whether a government order prohibiting or impairing the policyholder’s access to its covered property in connection with COVID-19 would be sufficient to trigger civil authority coverage under the policy.
Washington. On March 25, the Washington State Office of the Insurance Commissioner (OIC) issued a similar letter instructing all property/casualty insurers authorized to write business in Washington to provide the OIC with information regarding the commercial property insurance they have written in Washington state and the details on the business interruption coverage provided in the types of policies for which the insurer has ongoing exposure. For the purpose of the letter, “commercial property insurance” is defined to include business owner policies, commercial multiple peril policies, specialized multiple peril policies and policies providing substantially similar coverage to these policies.
The OIC letter required each responding insurer to provide the OIC with the volume of business interruption, civil authority, contingent business interruption and supply chain coverage the insurer wrote that was in effect on March 15.
The OIC letter also directed each insurer to examine the policies it has issued and explain the coverage each policy offers in regard to COVID-19, and to prepare and send to policyholders a “clear and concise explanation of benefits” under their policies that indicates whether the policies contain a requirement for "physical loss or damage" for business interruption coverages and whether contamination related to a pandemic may constitute “physical loss or damage.”
California. On March 26, the California Department of Insurance (CDI) issued a notice to all admitted and non-admitted insurance companies writing insurance in California requesting information related to business interruption coverage provided under commercial insurance policies. The notice asks insurers to provide information on the volume of business interruption coverage and explain other data elements for each policy. In particular, each insurer is directed to provide to CDI the volume of business interruption coverage, civil authority coverage, contingent business interruption coverage and supply chain coverage the insurer wrote that has not lapsed as of March 26. For these coverages, each insurer is directed to provide information on the following questions:
- How many policies are covered under each coverage identified above?
- Out of these policies, how many policies fall under businesses with more than 500 employees, or alternatively, meet your definition of large business?
- Out of these policies, how many policies fall under businesses with fewer than 500 employees, or alternatively, meet your definition of medium size business?
- Out of those with fewer than 500 employees, how many policies fall under businesses with fewer than 100 employees, or alternatively, meet your definition of small business?
On April 14, California Insurance Commissioner Ricardo Lara issued a Notice in response to complaints of “certain insurance representatives attempting to dissuade business policyholders affected by COVID-19 from filing a notice of claim under its business interruption insurance coverage or refusing to open and investigate these claims upon receipt of a notice of claim.” In the Notice, Commissioner Lara reminded insurers and their representatives of the obligations imposed by the California Fair Claims Settlement Practices Regulations to fairly accept, acknowledge, and investigate claims, including those arising from the COVID-19 outbreak.
Legislators at both the federal and state levels are considering whether to compel insurers to cover COVID-19-related losses under existing policies regardless of policy terms and conditions. The industry’s position is clear: property policies cover the risks attendant to physical loss or damage to property, including resulting loss of income and extra expense. Except as otherwise expressly set forth in a policy, they do not cover, and policyholders did not pay for coverage for, losses caused by communicable diseases.
On March 18, a bipartisan group of 18 members of the House of Representatives, led by House Small Business Committee Chairwoman Nydia Velazquez, sent an open memorandum regarding commercial business insurance coverage to the chief executives of the American Property Casualty Insurance Association (APCIA), the National Association of Mutual Insurance Companies (NAMIC), the Independent Insurance Agents & Brokers of America (the “Big I”), and the Council of Insurance Agents & Brokers (CIAB). In the memorandum, the lawmakers proposed that the insurance industry accept coronavirus-related financial losses subject to commercial coverage. The industry groups quickly responded, noting that property insurance policies, which are approved by state regulators, “do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.”
On March 31, the Congressional Research Service (CRS) issued a report to Congress in which it discussed the issue of business interruption insurance coverage. In the report, CRS noted that some industry sources have estimated the cost of covering business interruption claims for small businesses to range from $110 billion to $290 billion, monthly. Notably, the federal CARES Act does not address business interruption insurance coverage.
On April 10, President Trump indicated during a press conference that he would be supportive of requiring insurers to pay business interruption claims arising from the COVID-19 pandemic. “I would like to see the insurance companies pay, if they need to pay, if it’s fair,” the president said. “They know what’s fair and I know what’s fair. Business interruption insurance, that’s getting a lot of money to a lot of people.” President Trump continued by saying that, after businesses have paid premiums for years, if insurers “say we’re not going to pay” business interruption claims, “we can’t let that happen.”
The same day, a group of seven Republican senators wrote an open letter to President Trump, warning of harm to the insurance industry if proposed state laws requiring insurers to cover otherwise excluded business interruption claims. The senators’ letter concluded by stating that a substantive debate on business interruption coverage for future pandemics should be deferred until “the current crisis has been resolved,” and expressed skepticism “that any such proposal would be able to provide the appropriate coverage at an appropriate price for our nation’s small businesses.”
On April 16, a group of 22 Republican Members of Congress sent a similar letter to President Trump, in which they warned that “[s]hould lawmakers retroactively void exclusions, this would force insurers to pay claims they never priced or collected premiums for and would cost between $255-431 billion in claims per month according to one industry estimate.” The next day, members of the Freedom Caucus another letter to President Trump, in which they stated that retroactively amending insurance policies to require payment of otherwise-excluded business interruption claims would violate the Constitution and “engender unprecedented legal challenges while driving up the cost of insurance coverage of all kinds.”
On April 14, a bipartisan group of 10 Members of Congress led by Representative Mike Thompson (D-CA) introduced the Business Interruption Insurance Coverage Act of 2020 (H.R. 6494) in the Financial Services Committee of the House of Representatives. Under the bill, insurers offering business interruption insurance would be required, effective upon enactment of the bill, to cover losses resulting from (a) viral pandemics, (b) forced closures of businesses or mandatory evacuations by federal, state or local law or order and (c) power shut-offs conducted for public safety purposes, in each case, in a manner that is not materially different from the terms, amounts and other coverage limitations applicable to losses arising from other events. The bill would also render void exclusions for such losses in existing policies (and includes express language preempting any state approval of such exclusions), although it would allow an insurer to reinstate such preexisting exclusions if an insured fails to pay increased premiums for such coverage following at least 30 days’ notice of such of the increased premiums from the insurer.
On the same date, a narrower bill was proposed by four members of Congress in the same committee titled the “Never Again Small Business Protection Act of 2020” (H.R. 6497). This bill would require insurers offering business interruption insurance to offer coverage for losses resulting from governmental orders that require the cessation of operations during a national emergency for a period of at least 30 days following the declaration of the national emergency, subject to agreement by the applicable insureds to pay “any premium” charged by the insurer for providing such coverage. The bill would also exclude an insured business from coverage if it involuntarily terminates employees or terminates their health care insurance coverage during the national emergency, and it would be effective only upon certification by the Secretary of Treasury that there is a federal backstop mechanism in place to reinsure insurers for excessive losses due to the coverage required under the bill.
Pandemic Risk Insurance Act
Meanwhile, the House Financial Services Committee is considering the creation of a federal program for future pandemics. A memorandum prepared by the staff of the House Financial Services Committee on April 6th sets out priorities for a new federal program for economic relief from the effects of COVID-19 and includes the creation of a federal reinsurance program similar to the Terrorism Risk Insurance Program created in the wake of the September 11th attacks.
According to press reports, a draft bill prepared by Representative Carolyn Maloney is being circulated for discussion.4 The bill would create the Pandemic Risk Reinsurance Program for business interruption insurance, modeled after the Terrorism Risk Insurance Act (TRIA). Like TRIA, the proposed program would be administered by the U.S. Treasury Department and would provide Federal reimbursement to participating insurers for a percentage of their insured losses in excess of a specified company deductible once industry-wide losses exceed a specified program trigger. Like TRIA, the program would include a “make available” requirement-- in this instance, participating insurers would be required to make coverage for business interruption due to a public health emergency available on terms and conditions that do not differ materially from the terms, amounts and other coverage limitations applicable to losses due to other business interruption.
Unlike TRIA, participation in the program would be voluntary. Also unlike TRIA, participating insurers would be required to pay premiums in order to receive federal reimbursement.
Premiums would be “based on the actuarial cost of providing coverage.”Reimbursement under the program would be triggered by an event with aggregate industry business interruption losses of $250 million and the federal share of compensation would be 95% of losses above each insurer’s deductible, up to an aggregate cap of $500 billion. The amount of each insurer’s deductible would be 5% of its direct earned premium during the preceding year.
Notably, the bill would void any exclusions in existing policies of participating insurers that are in force on the date of enactment if such exclusions would exclude losses otherwise covered by the program. This potentially could extend coverage under the program to new stay-in-place orders that are reinstituted if there are recurrences of coronavirus outbreaks after the current orders are lifted. How insurers would be compensated for their increased exposure to losses within the deductible or that they retain as the “insurer’s share” is not addressed.
Speaker Pelosi reportedly asked all committee chairs for their “wish lists” for the next round of COVID-19 relief legislation earlier this week. In a memorandum distributed to House Democratic members in March, House Financial Services Chair Maxine Waters included PRIA legislation on a list of proposed legislative responses to COVID-19.5
Bills that would mandate retroactive business interruption coverage have been introduced in eight states, the District of Columbia, and Puerto Rico. None has advanced very far in the legislative process, although in the District of Columbia business interruption provisions were removed from omnibus COVID-19 legislation at the last minute prior to adoption.
In New Jersey, the legislature failed to vote on Bill No. A3844 that would have required insurers to cover business interruption claims submitted by certain businesses if the claims related to coronavirus-incurred financial losses. Insurers required to pay COVID-19-related business interruption claims could then seek reimbursement from the New Jersey Department of Banking and Insurance, which, in turn, would apportion losses through a special assessment of all authorized insurers writing that line of business.
Massachusetts, Ohio, New York, Louisiana, Pennsylvania, South Carolina, and Michigan have each since proposed bills requiring insurers to cover otherwise-excluded claims arising from the coronavirus. The Massachusetts, Ohio, New York, Pennsylvania, and South Carolina measures would each create a reimbursement fund that would be funded by an assessment on insurers based on net written premiums received by each insurer. The Massachusetts SD.2888 and South Carolina S 1188, would apply to businesses with as many as 150 employees, while Ohio House Bill 589, like the proposed New Jersey law, Louisiana’s HB 858, and Michigan’s H 5739 would only apply to businesses with 100 or fewer employees.
There are presently two proposed bills in the New York State Senate: S 8178, which would apply only to those companies with 100 or fewer employees, and S 8211, which would apply to businesses with up to 250 employees. The New York Assembly’s current proposed A-10226B would apply to businesses with up to 250 employees, and requires automatic renewal of policies providing business interruption and contingent business interruption coverage that expire during the state of emergency.
In Pennsylvania, House Bill H 2372, proposed on April 3, would only apply to businesses with 100 or fewer employees. The Pennsylvania Senate’s SB1114, proposed on April 15, does not have a similar limit. Instead, the S 1114 requires payments of 100% of coverage of claims by small businesses and 75% of claims made by all other claimants.
The Pennsylvania Senate’s S 1127, proposed on April 30, would apply to any business, regardless of size, that carries a commercial property policy. That bill does not direct insurers to make payments of business interruption claims, however, and instead defines certain terms applicable in many such policies. For example, S 1127 states that if a covered property is within a municipality where “the presence of the COVID-19 coronavirus has been detected,” that property has suffered damage. Further, it defines the Pennsylvania Governor’s emergency closure order as constituting “an order of civil authority under a first-party insurance policy limiting, prohibiting or restricting access to non-life-sustaining business locations in [Pennsylvania] as a direct result of physical damage at or in the immediate vicinity of those locations.” If enacted, the bill would effectively override many of the defenses insurers assert in response to COVID-19 related business interruption claims.
The Massachusetts SD.2888, the Pennsylvania SB1114, the South Carolina S 1188, and the NY A-10226B all explicitly address the ISO policy exclusion for viruses, which arose out of the SARS pandemic several years ago, and which requires payment even where that exclusion would apply. Although many bills do not expressly mention the virus exclusion, it is likely that the bills intend to override the exclusion. South Carolina also addresses the “ordinance or law” exclusion in certain policies, which typically excludes coverage where the damage arises from the enforcement of or compliance with an ordinance or law regulating property.
On April 22, a bill (A-10327) was introduced by Democrat Linda Rosenthal in the New York Assembly requiring that business interruption policies issued to certain human services and community-based health providers be construed to provide coverage for business interruption during a declared state emergency due to the COVID-19 pandemic.
Other efforts may take the form of legislative declarations that COVID-19 related business interruption is the result of damage or loss to property. For example, a non-binding resolution by the San Francisco Board of Supervisors declared the proclivity of the virus to adhere to surfaces for prolonged periods of time to amount to physical property loss or damage, and further requests that the California Insurance Commissioner consider it to be a material misrepresentation to deny in any public filing that COVID-19 does not have a propensity to cause property loss or damage.
These bills raise many questions that should be addressed in evaluating the viability of the proposed programs, including:
- How can the programs be structured so that they are not unconstitutional?
- How can the programs be funded without creating solvency burdens or unfairly affecting competition?
- Will insurers be able to pass surcharges on to policyholders by charging higher premiums?
- Which policyholders will receive the benefit of the legislative measures?
- How will reinsurance with respect to the policies subject to the legislation be impacted?
All but a small number of states have closed their legislatures as a result of the pandemic. That said, the legislatures in Massachusetts and Ohio are both open, and the Pennsylvania legislature is convening in April on an abbreviated, six-day schedule. Although New York’s State Assembly is in recess, the Committee on Insurance met to amend that state’s proposed bill.
Industry Comments and Activity
With this proposed state legislation as the backdrop, on March 25, the NAIC issued a statement opposing any legislative proposals that would require insurers to retroactively pay unfunded COVID-19-related business interruption claims that insurance policies do not currently cover.
The National Council of Insurance Legislators (NCOIL) sent a letter to the Chair of the House of Representatives Committee on Small Business outlining NCOIL’s position on this issue. In the letter, NCOIL stated that any efforts by state legislators to enact legislation that would effectively override policy exclusions, as discussed above, “would violate the Contract Clause within Article I of the United States Constitution, which prohibits the Legislature from impairing the obligation of contracts.” Instead, NCOIL proposed a solution akin to the Victims Compensation Fund that was established following the 9/11 attacks by creating a COVID-19-related fund to assist businesses with business interruption claims. NCOIL specifically suggested the creation of:
a COVID-19 Business Interruption & Cancellation Claims Fund (COVID Claims Fund) incorporates the usage of the insurance industry’s claims processing systems to handle claims processing for the Fund in order to ensure all claims are validated prior to payment, removing any that do not meet the established criteria. We also would suggest that legislation establishing the COVID Claims Fund be preemptive of any State efforts to mandate business interruption coverage for the virus, for the constitutional reason discussed above.
In its letter, NCOIL also expressed optimism that it would support the proposed PRIA, discussed above.) NCOIL also pointed out that its Claims Fund proposal would explicitly cover non-insured pandemic losses, including those subject to the type of exclusions discussed above.
1APCIA Press Release, “APCIA Releases Update to Business Interruption Analysis” (April 28, 2020).
2A.M. Best Company, “Legislation to Nullify BI Exclusions Poses Existential Threat to P.C Insurers” (May 5, 2020).
3S&P Global, “Credit FAQ: How COVID-19 RISK Factor into U.S. Property/Casualty Ratings” (April 27, 2020).
4“Proposed Virus Coverage Backstop Leaves Pricing In The Air,” Law360 Insurance (April 17, 2020).