The COVID-19 pandemic and resulting government shutdowns have hit many businesses in Washington. Many small and mid-sized companies sought financial relief through a business interruption policy only to have their insurer deny the claim. The denial of a business interruption claim can put a serious strain on an already struggling business.
Following some positive state court rulings in favor of policyholders, a group of Washington legislators have introduced a new bill (SB 5351) to provide more protections to affected businesses. Here, our Spokane insurance law attorneys highlight some of the key things that business owners and policyholders need to know about the proposed business interruption insurance reforms.
Four Things Policyholders Should Know About SB 5351 and Business Interruption Insurance
1). Many Coronavirus-Related Business Interruption Claims Were Denied
Business interruption insurance coverage provides financial support in the event that a company is temporarily forced to restrict or halt operations. Many small business owners filed a business interruption claim to cover losses related to the COVID-19 pandemic. However, for a wide variety of different reasons, a large share of these claims were denied. Many Washington business owners have complained that insurance companies have unfairly rejected benefits.
2). SB 5351 Seeks to Codify Policyholder Protections in Recent State Court Rulings
Perhaps the most important thing to know about SB 5351 is that it seeks to codify recent Washington state court rulings that limit the ability of insurance companies to interpret policy language in a very narrow manner. As an effect, the law would allow a greater number of small businesses to bring a successful business interruption claim for COVID-19-related losses.
3). The Bill Would Also Extend the Statute of Limitations for Business Interruption Claims
As currently drafted, SB 5351 contains a provision to extend the statute of limitations for certain business interruption claims in Washington. The bill would give qualifying small businesses an additional year to appeal the denial of a coronavirus-related business interruption claim.
4). Insurance Industry Groups are Aggressively Fighting the Legislation
SB 5351 still has to overcome some important legislative hurdles before it becomes law. Notably, major insurance industry interest groups are planning to fight hard against the legislation. Not only is there a strong lobbying effort to stop or change the bill, but the industry has also expressed its intent to file a lawsuit challenging the constitutionality of the legislation should it become law. Our Spokane, WA insurance lawyers will keep a close watch on all developments.
Get Help From Our Spokane Insurance Lawyers for Immediate Legal Help
At Albrecht Law PLLC, our Washington insurance lawyers have the knowledge and experience to hold corporations accountable for paying claims. If you have any specific questions about business interruption claims and COVID-19, we are ready to get started working on your behalf. Contact our firm today for a free, no commitment review of your claim. We handle insurance appeals in Spokane and throughout Eastern Washington and Central Washington.
