Members of Congress ask California insurance commissioner to ensure businesses can use business interruption insurance

On Tuesday, Rep. Mike Thompson (CA-05) and 32 bipartisan Members of the California delegation in writing to California Insurance Commissioner Ricardo Lara asking him to use his authority to ensure insurance companies comply with their business interruption policies.

After hearing that some businesses that had purchased this insurance were getting denied, Thompson and the other signers wrote the below letter to help the businesses get these claims filled so they can remain solvent throughout closures due to the coronavirus pandemic.

The letter was signed by Representatives Ken Calvert (CA-42), Anna Eshoo (CA-18), Zoe Lofgren (CA-19), Barbara Lee (CA-13), Grace F. Napolitano (CA-32), Mike Thompson (CA-05), Adam B. Schiff (CA-28), Jim Costa (CA-16), Doris Matsui (CA-06), Jerry McNerney (CA-09), Jackie, Speier (CA-14), Tom McClintock (CA-04), Judy Chu (CA-27), Ami Bera (CA-07), Julia Brownley (CA-26), Tony Cardenas (CA-29), Jared Huffman (CA-02), Doug LaMalfa (CA-01), Alan Lowenthal (CA-47), Raul Ruiz, M.D. (CA-36), Eric Swalwell (CA-15), Ted W. Lieu (CA-33), Norma J. Torres (CA-35), Nanette Diaz Barragan (CA-44), J. Luis Correa (CA-46), Ro Khanna (CA-17), Jimmy Panetta (CA-20), Jimmy Gomez (CA-34), Gilbert R. Cisneros, JR. (CA-39), TJ Cox (CA-21), Josh Harder (CA-10), Mike Levin (CA-49), Katie Porter (CA-45) and a copy is attached.

March 31, 2020

Commissioner Ricardo Lara
Insurance Commissioner
300 Capitol Mall, 17th Floor
Sacramento, CA 95814

Dear Commissioner Lara:

We urge you to exercise all authority to ensure the insurance companies comply with their business interruption policies. During this crisis, we must do everything possible to mitigate the devastating impact on small businesses due to the coronavirus pandemic.

As you know, many businesses have in good faith purchased and paid for business interruption insurance to cover the loss of business income sustained due to a necessary suspension of the business operations. However some insurers are choosing to deny these business interruption claims and not uphold their responsibility to help cover these insured losses. Without immediate action to address the denial of business interruption insurance claims, many businesses like our local restaurants, hotels, bars, small tourist shops and countless other businesses that are staples of our local communities will simply never resume service. California in particular has been battered year after year by earthquakes and fires and small businesses have not fully recovered from those previous disasters.

The coronavirus poses significant challenges to many small businesses and we are urging you to exercise all authority to have insurance companies comply with their business interruption insurance to cover losses caused by a California statewide business shutdown ordered to prevent the spread of coronavirus. During this crisis, we must do what it takes to work together to help our small businesses survive and recover. We appreciate your strong support to help California small business owners remain solvent during the coronavirus pandemic and keep employees on payroll until things stabilize.

Thank you for your leadership attention to this urgent matter. We look forward to working with you until this crisis is resolved.