Too many business owners have been dismayed to learn in recent weeks that their business interruption insurance policy did not kick in during the coronavirus pandemic, state Sen. Rick Ward told his colleagues Tuesday.
Insurance companies have pointed to the fine print that they don’t have to cover an unexpected shutdown caused by a virus.
So Ward offered Senate Bill 477 to try to keep policy holders from being caught unaware. SB477 would require insurance policies to list in advance all the exclusions an insurance company could cite to avoid covering the losses. The policy holder would have to acknowledge reviewing that list.
The Senate approved SB477 Tuesday, 31-4. It now goes to a House committee for consideration.
Ward, R-Port Allen, likened the proposed change to a similar one involving people who don’t want the portion of the insurance policy that covers accidents caused by uninsured motorists. Ward said that many people found that their insurance policy did not cover accidents with an uninsured motorist.
The law was changed to require policy holders who didn’t want that provision to sign an acknowledgement.
Under SB477, Ward said, the insurance commissioner would have to prepare a form that would list the exclusions. It would take effect on Jan. 1.
“It would be mutually beneficial for the agent selling the policy and the business,” Ward said, since the agent would likely field fewer complaints from their customers.