Even before California’s official shelter-in-place order went into effect, countless businesses around the state were facing declines in business because of the coronavirus pandemic. Times only got harder when many different types of businesses were forced to either operate on a limited basis or temporarily close their doors. But when those affected business owners tried to make claims on their business interruption policies, insurers very broadly denied those claims without any investigation. In some cases, insurers discouraged policyholders from even attempting to make a claim for business interruption damages.
With numerous complaints coming in from business owners and public officials throughout the state, Insurance Commissioner Ricardo Lara has stepped in to help. On April 14, 2020, Lara issued an order requiring all insurers to fairly investigate all business interruption claims stemming from the COVID-19 crisis.
Under the notice and other existing regulations in the state of California, insurers and other licensees are required to do the following:
- Comply with contractual, statutory, regulatory, and legal obligations in regards to all California insurance claims. This includes, but is not limited to business interruption insurance, event cancellation insurance, and other types of related insurance claims.
- Acknowledge claim notifications immediately; in no more than 15 calendar days of receipt.
- Provide policy holders with all necessary forms, instructions, and assistance. This includes, but is not limited to, specifying the information the policy holder needs to provide in support of their claim and beginning necessary investigations into claims.
- Accept or deny claims, either in whole or in part, in no more than 40 days after receipt of the proof of claim. Unless a claim has been denied in full, the amount of the claim that has been accepted or denied must be clearly stated in the claim file.
Lara stated, “I want to be absolutely clear that insurance companies need to fairly investigate all business interruption claims as they would during any disaster…Policyholders deserve all the services, coverage, and benefits they are due under their policy.”
If you’re a California business owner who has had a business interruption claim denied, we’re here to help. The Wallace Firm is now assisting business owners with these types of insurance claims. If you haven’t made a claim yet but are getting ready to, we can also work with you to prepare your claim. We’re handling these cases on a contingency basis, so you won’t pay any fees unless we help you win. Contact us today for a free case evaluation with one of our attorneys.