NAIFA's Advocacy in Action Blog

D.C. Council Removes Business Interruption Insurance Measure from Omnibus Bill

Written by NAIFA | 5/6/20 2:26 PM

All eyes were on the Washington, D.C., Council on Tuesday morning. Included in its “Coronavirus Omnibus Emergency Amendment Act of 2020” was a proposal to essentially rewrite business income insurance policies and require the industry to pay for losses that were not covered. The Council ultimately agreed to withdraw the language before passing the omnibus bill. The business interruption insurance measure could have threatened the financial solvency of the District's insurance industry, so having it removed was a major win for insurers.

 

“NAIFA is sympathetic to businesses suffering financial losses due to COVID-19 interruptions and has supported many legislative efforts to provide them relief,” said NAIFA CEO Kevin Mayeux. “But shifting burdens not covered under original contracts to insurers is not good public policy and almost certainly would not stand up in court. The harm it would cause the business insurance industry would be unfair to the many small businesses that depend on business-interruption policies to cover the types of losses they were written to cover.”

 

NAIFA participated in a coalition of other insurance industry associations and fought hard to get the message to Council members that retroactively rewriting already-approved insurance contracts was unfair and illegal. During the Tuesday morning hearing, Council members reiterated our message that the measure would likely be challenged and overturned in the courts and passing it would have offered false hope to small businesses in the District of Columbia.

 

NAIFA is working to head off similar efforts to retroactively revise business-interruption coverage in several states.