Requires insurers offering commercial general liability insurance policies to provide notification of exclusion for communicable disease.
Impact
If enacted, S539 would significantly alter the way insurance companies must disclose policy information regarding communicable disease exclusions. The bill stipulates that if an insurance policy does not include the required statement about exclusions, those exclusions would be made invalid, thereby automatically deeming the policy to cover transmission of communicable diseases. This could lead to increased liability coverage for businesses and additional responsibilities for insurers to communicate policy details more effectively.
Summary
Senate Bill S539 requires that insurers offering commercial general liability insurance policies provide clear notifications to potential purchasers and policyholders about any exclusions related to the transmission of communicable diseases, specifically mentioning COVID-19. This bill aims to enhance transparency in insurance policies, ensuring that businesses are fully aware of their coverage limitations, especially in the wake of the coronavirus pandemic. By mandating a separate page with this information, the bill seeks to prevent surprises for policyholders concerning their liability in the context of communicable diseases.
Contention
While the bill seeks to protect businesses, it may face contention from insurance companies and industry groups who might argue that such requirements could lead to increased costs or further complicate the underwriting process. Additionally, the requirement for clear notifications may face opposition from entities concerned about the potential implications on premium rates and overall market dynamics. Discussions around S539 may bring to light valid concerns about balancing consumer protection with operational feasibility for insurers.