Coronavirus Insurance Alert – Ohio House Proposes Legislation to Require Insurers to Cover Business Interruption Losses for Small Businesses

On March 24, 2020, members of the Ohio House introduced H.B. No. 589, the purpose of which is “to require insurers offering business interruption insurance to cover losses attributable to viruses and pandemics and to declare an emergency.” The proposed legislation attempts to statutorily eliminate any obstacles to coverage, such as exclusions for virus and pandemic related losses, under policies “insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption.” It further requires an insurer to provide such coverage, up to policy limits, for business interruption losses that occurred during the duration of the state of emergency declared by Governor DeWine on March 8, 2020.

The bill is intended to provide relief to small businesses suffering the effects of the coronavirus, as it applies only to businesses operating in Ohio that have 100 or fewer employees. The bill further creates a mechanism by which insurers that are required to extend coverage may later seek reimbursement of such payouts from the Superintendent of Insurance from a fund to be created from special assessments imposed on insurers that issue business interruption coverage.

The proposed legislation is patterned after a bill recently introduced in the New Jersey legislature. That bill has been met with stiff resistance by the insurance industry and has been tabled as a result. H.B. 589 will likely meet the same opposition.

Frantz Ward has established a Coronavirus Response Team to assist clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly or Chris Koehler and they will engage the appropriate members of the response team. 

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