close up of a coronavirus molecule

Property and Casualty

COVID-19 Report

close up of a coronavirus molecule

Property and Casualty

COVID-19 Report

Massachusetts Bill Rewrites Business Interruption Insurance Coverage

Proposed Massachusetts S.D. 2888 prohibits insurers from denying a claim for the loss of use and occupancy and business interruption on account of 1) COVID-19 being a virus (even if the relevant insurance policy excludes losses resulting from viruses); or 2) there being no physical damage to the property of the insured or to any other relevant property. The bill goes beyond other similar state bills in that it explicitly mandates coverage even in the face of unambiguous policy language. Also, unlike other similar bills that apply to insureds with 100 employees, the Massachusetts bill would apply to insureds with “150 or fewer full-time equivalent employees” in Massachusetts.

The Massachusetts bill provides insurers restitution from “funds collected and made available for such purpose as provided” in the proposed law “assessments” imposed “against licensed insurers in [Massachusetts] that sell business interruption insurance as may be necessary to recover the amounts paid, or estimated to be paid, to insurers” seeking reimbursement. The Massachusetts bill covers any loss of business or business interruption “until such time as the emergency declaration issued by the governor, dated March 10, 2020, and designated as executive order number 591, is rescinded by the governor.”

MA S.D. 2888