Insurance: business interruption: coverage for COVID-19.
AB743 will have immediate implications for existing insurance policies that cover business interruptions. The bill offers protection to businesses by ensuring that claims related to COVID-19 cannot be dismissed on the grounds that the virus is considered a pollutant or contaminant unless explicitly stated in the policy. This protection extends retroactively to policies effective after March 4, 2020, thereby safeguarding businesses that have already experienced disruptions during the pandemic. The intent is to assist in the preservation of business solvency and to mitigate the economic impact of government-mandated closures.
Assembly Bill 743 (AB743), introduced by Assembly Member Ramos, addresses insurance coverage specifically related to business interruptions resulting from the COVID-19 pandemic. This legislation is significant as it aims to create a framework under which businesses forced to close or limit operations due to government orders related to COVID-19 can more effectively access their insurance benefits. The bill adds a new chapter to the Insurance Code that establishes rebuttable presumptions regarding coverage, which facilitates the burden of proof on the insured parties when claiming business interruption due to COVID-19.
As an urgency statute, AB743 calls for immediate enactment, highlighting the pressing need for support during the ongoing economic challenges faced by business owners. However, there may be concerns raised by insurance providers regarding the implications of establishing rebuttable presumptions which could potentially impact the insurance industry's operational frameworks. Detractors may argue that this legislation could result in increased claims and financial strain on the industry, while proponents emphasize the necessity of protecting small businesses amidst unprecedented challenges.