Earlier this week the California Department of Insurance issued a reminder that all business interruption claims stemming from Covid-19 losses, which are expressed by policyholders must be fairly submitted by all agents and brokers, and properly investigated by all carriers. The reminder comes after the Department received numerous complaints from businesses, public officials and insureds.

Under California law, agents and brokers should not dissuade policyholders from making business interruption claims. Further, they must accept and transmit communications providing notice of such losses to the policyholder’s insurance carrier(s). Once a carrier is on notice of a business interruption claim stemming from Covid-19 the established statutory framework and deadlines must be complied. This includes an obligation that all carriers conduct a diligent, thorough, fair and objective investigation into the claim. If it is determined that a denial of a first party business interruption claim is appropriate, then California law requires the carrier to not only identify the specific bases for the denial, but include an explanation of same.


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