June 29, 2020
June 22, 2020
- PPP Loan Forgiveness Application Forms Updated and Streamlined
- Nevada Division of Insurance to Disallow Policy Exclusions Related to COVID-19
- CDI Announces New Order Regarding Workers’ Compensation Premium Savings for CA Businesses Affected by COVID-19
june 15, 2020
june 10, 2020
- Note to the SBA: Debtors in Bankruptcy Are Eligible for PPP Loans
- California Modifies the Tolling of Statutes of Limitations in Civil Cases
june 8, 2020
- CCPA Enforcement Date Fast Approaching Regardless of COVID-19
- Hotels in California May Be Days Away From Reopening: What Hoteliers Need to Know
June 4, 2020
may 29, 2020
may 28, 2020
- House Introduces Pandemic Risk Insurance Act of 2020 in the Wake of COVID-19 Business Interruption Claims
may 27, 2020
- Hoteliers Beware: a Return to Business Post-Pandemic Brings With It Potential Legal Liability
- House Contemplates Revisions to the Paycheck Protection Program
may 15, 2020
may 14, 2020
- U.S. House Democrats Introduce HEROES Act, a New $3T Stimulus Package
- SAFE Banking Act for Cannabis-Related Businesses Included in the HEROES Act
may 12, 2020
may 8, 2020
- Treasury and the SBA Issue Guidance Regarding the Employee Retention Credit
- Businesses Reopen in Los Angeles County as Stage 2 of California’s Statewide Plan Begins
- Update: Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. County Ordinance
may 6, 2020
- SBA Extends PPP Certification Safe Harbor to May 14
- A 2008 Redux: IRS Provides Temporary Cash/Stock Dividend Relief for Publicly Offered REITs and RICs
- EPLI Insurance and Employee Benefits in the Age of the Coronavirus
may 5, 2020
- Update: PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
- NAIC Issues Business Interruption Data Call in the Wake of COVID-19
may 4, 2020
- PPP Guidance Issued by the SBA and U.S. Treasury at Odds With the CARES Act—Michelman & Robinson Files First-of-Its-Kind Lawsuit Challenging FAQs
may 1, 2020
april 29, 2020
- Planning for Your Employees' Return to the Workplace
- Los Angeles Hospitality Workers Among Those Thrown a Potential Lifeline
april 24, 2020
- Attention Cannabis Businesses: Hope May Be on the Horizon for Federal COVID-19-Related Relief
- California Department of Insurance Issues Notice Granting Tax-Filing Extension in Response to COVID-19
- SEC Approves Amendments to Nasdaq and NYSE Continued Listing Requirements Due to the COVID-19 Pandemic
April 23, 2020
april 21, 2020
- Additional Funding Is on the Way to Resurrect the PPP
- Certifying Your PPP Loan: Proceed With Caution
april 17, 2020
april 16, 2020
- Employment in the Wake of Coronavirus: EEOC and OSHA Guidance Allows Employers to Go Where They Could Not Go Before
- New Yorkers Ordered to Stay at Home Even Longer Amid the COVID-19 Crisis
- Paycheck Protection Program Funds Exhausted
april 15, 2020
- Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
April 14, 2020
- Insurance Companies Have Been Ordered to Provide COVID-19-Related Premium Relief to Businesses and Drivers in California
- What to Do If Your New York Business Has Been Deemed Non-Essential
APRIL 13, 2020
- IP Deadlines and Fees Extended Under the CARES Act
- Employment in the Wake of Coronavirus: Reintegrating Your Workforce in the New Normal
APRIL 10, 2020
- You Successfully Applied for and Received a PPP Loan Under the CARES Act: Now What?
- Safer at Home Order in L.A. Extended to May 15
- Maintaining Your Trade Secrets During the Coronavirus Crisis
APRIL 9, 2020
april 8, 2020
- Congress Looks to Bolster the PPP With Another $250B in Funding
- U.S. Treasury Provides Further Guidance to PPP Borrowers and Lenders
- L.A. Mayor Amends COVID-19-Related Paid Sick Leave Ordinance
april 7, 2020
- Clarifying the Paycheck Protection Program: Payment of Insurance Premiums and Loan Forgiveness under the CARES Act
April 3, 2020
april 2, 2020
april 1, 2020
March 31, 2020
march 30, 2020
- Large Employers Required to Pay Coronavirus-Related Sick Leave Under New L.A. Ordinance
- Insurance Coverage Potentially Triggered by COVID-19
- Attention Insurers: CDI Orders Mandatory Call for Business Interruption Coverage Information in the Wake of COVID-19
- DOL Is Requiring Employers to Post Families First Employee Rights Notice
March 27, 2020
- A Comprehensive Guide to Understanding Coronavirus-Related State Assistance Programs: Who is Giving What to Whom (Part II)
- IRS Releases “People First Initiative” Temporarily Adjusting and Suspending Key Compliance Actions
- HHS Relaxing Enforcement of HIPAA to Facilitate Sharing of Information During the COVID-19 Crisis
March 26, 2020
march 25, 2020
march 24, 2020
- Navigating the Coronavirus Pandemic: a Critical Business Review Checklist
- SBA Loans for Companies Impacted by Coronavirus
- SEC Relaxes Federal Proxy Rules for Annual Meetings
march 23, 2020
- Federal Reserve Responds Boldly to Coronavirus-Related Economic Downturn
- The Number of Jurisdictions Implementing Stay-at-Home Orders Is Increasing Exponentially
- Michelman & Robinson’s Guide to Coronavirus-Related Paid Sick Leave and Unemployment Insurance Laws in the Tri-State Area
MARCH 21, 2020
- New Jersey Orders Its Residents to Stay Home
- “Essential Businesses”— What if I am Stopped?
- The IRS and States Provide Tax Relief in the Wake of the Coronavirus Pandemic
MARCH 20, 2020
- New York Governor’s PAUSE Order
- Illinois Governor’s Statewide Stay-at-Home Order
- Force Majeure Clauses in Commercial Real Estate Contracts
MARCH 19, 2020
- SEC Provides Regulatory Relief for Public Reporting Companies
- Student Loan Borrowers Can Breathe a Sigh of Relief, At Least Temporarily
- California Governor's Statewide Stay-At-Home Order
MARCH 18, 2020
- "Shelter in Place" Orders
- Telecommuting in the Age of Coronavirus
- Families First Coronavirus Response Act Just Passed by the Senate and Signed Into Law by the President
MARCH 17, 2020
- M&R Coronavirus Risk Mitigation Team: A Multi-Disciplinary Legal Team Ready To Immediately Address A Host Of Coronavirus-Related Issues for Businesses, Quickly And Holistically
MARCH 16, 2020
MARCH 5, 2020
Attention Insurers: the CDI Has Ordered You to Fairly Investigate All Business Interruption Insurance Claims Caused By the COVID-19 Outbreak
APRIL 15, 2020
That businesses have seen a sharp—and in some instances, total—decline in revenue due to the coronavirus crisis is something we all continue to grapple with. Indeed, the stay-at-home and similar orders in place throughout the nation have served to bring commerce to a screeching halt across industries. Consequently, business owners are turning to their insurance portfolios, seeking to invoke business interruption coverage—to the extent they have it available to them—to compensate for mounting losses of income and the like.
In a previous alert, Michelman & Robinson addressed business insurance coverage potentially triggered by COVID-19, anticipating an uptick in related claims that, in fact, has come to fruition. And with the surge of business interruption claims activity has come complaints to the California Department of Insurance that some insurance companies and producers are either dissuading policyholders from pursuing such claims or refusing to open and investigate them upon receipt of proper notices.
In response, California Insurance Commissioner Ricardo Lara has just issued a notice to ensure that all agents, brokers, insurance companies, and other licensees accept, forward, acknowledge, and fairly investigate all business interruption insurance claims submitted by businesses. Commissioner Lara’s notice is sure to raise questions from insurers and producers doing business in the Golden State, which M&R answers as follows:
Q. What is the basis of the commissioner’s notice regarding business interruption insurance?
A. Commissioner Lara points to the California Fair Claims Settlement Practices Regulations (Regulations) that require carriers to acknowledge all claims notices—written or otherwise—immediately, but in no event more than 15 calendar days after they are received. The Regulations also state that the failure of an insurance or claims agent to transmit a notice of claim to an insurer promptly will be imputed to that insurer (though this does not apply to policies issued pursuant to the California Automobile Assigned Risk Program).
It is based upon this regulatory guidance that Commissioner Lara has premised his notice that, at its core, is simply a reminder as to how insurance companies and producers are to respond to business interruption claims made in the wake of the coronavirus pandemic.
Q. According to Commissioner Lara's notice, what steps must an insurer take once it receives a notice of claim seeking coverage for losses due to COVID-19-related business interruption?
A. As with any claim and pursuant to the Regulations, a carrier, upon receipt of notice, must provide a policyholder with the necessary forms, instructions, and reasonable assistance regarding its business interruption claim. Thereafter, an investigation must be commenced (if necessary), and that investigation has to be conducted diligently, thoroughly, fairly, and objectively. Of note, an insurance company or its representatives cannot seek information that is not material to the resolution of any claim dispute before determining whether the claim will be accepted or denied, either in whole or in part.
Q. What must be done upon completion of the requisite business interruption claim investigation?
A. By way of his notice, Commissioner Lara cites to the Regulations in reference to an insurer’s post-investigation obligations. More specifically, upon completion of a diligent, thorough, fair, and objective investigation, the carrier must accept or deny the given business insurance claim, in whole or in part, immediately, but in no event more than 40 days after receipt of the proof of claim. In so doing, the amount of the claim accepted or denied by the insurer needs to be clearly documented in the claim file (unless the claim has been denied in its entirety).
Q. Are there any particular requirements that an insurance company must abide by if it denies a business insurance claim?
A. Yes, if a business interruption claim is denied, in whole or in part, the carrier must communicate the denial in writing to the policyholder listing all the legal and factual reasons for its decision. Again, this requirement is stated in the Regulations and applies to all claims, not only those related to business interruption coverage.
Q. What is the takeaway from Commissioner Lara’s notice?
A. Truth be told and by way of his notice, the commissioner has not articulated to insurance companies and producers anything they do not (or should not) already know. Essentially, the directive simply shines a light on the ongoing duty of carriers and those associated with them to comply with their contractual, statutory, regulatory, and other legal obligations in connection with all California insurance claims, including those seeking coverage for losses due to business interruption caused by COVID-19. Likewise, Commissioner Lara instructs insurers and producers not dissuade policyholders from filing associated claims notices.
Q. Beyond CDI directives, are there any changes on the horizon to the laws related to business interruption insurance coverage?
A. Perhaps. On Tuesday (April 14, 2020), Congressman Mike Thompson, who represents California's 5th Congressional District (which includes all of Napa and parts of Contra Costa, Lake, Solano and Sonoma Counties) introduced the Business Interruption Insurance Coverage Act (H.R. 6494), a bill that—if passed into law—would greatly limit the ability of insurance companies to deny business interruption claims going forward. By way of his legislation, Congressman Thompson seeks to ensure that policyholders that have purchased business interruption coverage are protected in the event of viral pandemics like COVID-19, as well as closures or evacuations mandated by government officials and power shut-offs. Toward that end, the bill in its current form would bar insurers from implementing virus exclusions, with certain exceptions.
It is important to understand that, having just been introduced, this legislation is in the very early stages, and even if it does eventually become law, the bill would not apply retroactively to policyholders who have had their coronavirus-related businesses interruption claims denied.
We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.