The Current State of Business Interruption Laws in Nebraska
As the COVID-19 pandemic continues to rage on in the United States, many businesses are still struggling to stay above water. While one would hope that business interruption insurance would cover shutdowns and closures related to the pandemic, numerous insurance providers have rejected claims on the basis that they do not cover viral outbreaks. Several cases are still under litigation in the courts that could shift the tide one way or the other, but there is some hope in the form of legislation.
What Is the Business Interruption Act of 2020?
As business interruption insurance is traditionally designed to provide financial compensation when a business is forced to close in an emergency, such as a fire, flood, or tornado, many business owners feel that these same policies should apply to the coronavirus. Because many had to close down to avoid outbreaks and minimize the spread of the disease, their hope is that their insurance policies can help them weather the storm until it is safe to reopen fully. Sadly, that is not the case, and insurance providers are currently battling out these claims in various courts across the United States.
Given that these cases can take years to resolve, it is unwise to rely on the courts to find a solution. Instead, many are now looking at the Business Interruption Act of 2020 (BIA). Originally drafted by House Representative Mike Thompson from California, this simple law would require insurance companies to extend business interruption coverage to three scenarios:
- Viral outbreaks
- Government-enforced closures
- Power outages
If this new law was ratified, it could effectively force insurance companies to honor their insurance policies and payout claims to millions of business owners across the United States, including to those struggling in Nebraska.
What Is the Pandemic Risk Insurance Act?
However, this is not the only law being pushed forward. Under the guidance of House Representative Carolyn B. Maloney of New York, the Pandemic Risk Insurance Act of 2020 (PRIA) would provide similar but more complex requirements for insurance companies. Through PRIA, the federal government would effectively define a “covered public health emergency” to include viral outbreaks and expand business interruption insurance to provide coverage for such outbreaks. While this would include COVID-19, it would also apply to future viral outbreaks. In addition, this law would create a Pandemic Reinsurance Program that would allow the Department of the Treasury to provide compensation for claims related to COVID-19 shutdowns alongside business interruption coverage.
What About State Laws?
Currently, there are no acts being pushed forward in Nebraska that would influence business interruption insurance policies. That being said, several states across the country, from Louisiana to Michigan, have drafted various pieces of legislation based around this issue, so it is possible for the state of Nebraska to follow suit. In addition, several state departments have also issued new guidelines about business interruption insurance that clarifies how the laws apply to pandemics and government-enforced closures. It is still possible for the Nebraska state government to take a side in this issue and grant business owners financial relief.
What Can You Do in the Meantime?
Until a verdict is reached in the courts or legislation is passed on a state or federal level, Nebraska business owners should begin talking to attorneys as early as possible. Cases are being heard across the country and, with the right attorney, you may be able to successfully file a business interruption claim through settlement negotiations or a trial, if necessary. But these cases are incredibly complex given the current state of the laws surrounding pandemics. You will want to give your attorney as much time as possible to investigate your claim and determine the best legal strategy to get you compensation.
If your business was forced to shut down due to the pandemic, reach out to an Omaha commercial litigation attorney at Bottlinger Law L.L.C. Our legal team can review your business interruption insurance policy and determine the best strategy to get you the compensation your business needs. To learn how to file a claim, contact our office at (402) 505-8234.
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