File measure to prevent insurance companies from denying coverage to merchants during COVID-19 pandemic

Representatives José “Quiquito” Meléndez, Denis Márquez, and Ángel Matos, filed a bill to provide greater protection to merchants who are forced to close their businesses as a result of a national emergency declaration, as is currently the case with the COVID-19 pandemic.

The tripartite project (P of C 2469) establishes that no insurance company, during an emergency declared by the Governor of Puerto Rico and / or the President of the United States, due to a pandemic, may reject coverage to the insured that they have closed their businesses as a consequence of an order decreed by the government. Likewise, it establishes that during a declared emergency the virus and / or disease exception should not apply in commercial insurance policies regarding loss due to “business interruption”.

“It is important that all sectors work together to overcome this crisis. Insurance companies are an essential part in this process. It seems important to us to clarify that there should not be any exception available in the event of involuntary closure by order of the Governor, in the “business interruption” policy. The insured obviously acquire this type of policy to deal with situations beyond their control. This is one of those. Although the insurance companies could make these payments without legislation, it is very sad that, due to their inaction, we find ourselves obliged to resolve through the legislative route, ”said the representative of the New Progressive Party, José“ Quiquito ”Meléndez.

For his part, the representative of the Puerto Rican Independence Party, Denis Márquez, expressed that “the law must be clarified to prevent insurers from using subterfuges to avoid complying with policyholders, and this legislative effort is precisely aimed at protecting trade , particularly medium and small merchants, as well as professionals, who are affected by the insurers’ non-compliance or accommodative interpretations in moments of national emergency such as the case of COVID-19. ”

Finally, the representative of the Popular Democratic Party, Ángel Matos, called on the insurance companies to do justice to the small merchants. “I ask the insurers in the yard to take pity on the small merchants who have invested with great sacrifice in a business interruption policy, and now that the emergency forces them to close, they have no remedy to shovel their losses. COVID-19 has changed the way of doing business on the island and we have to adapt to the times. ”

The measure also establishes that any insurance company authorized to do business in Puerto Rico that rejects coverage for “interruption of services” during a national emergency will be committing unfair practices prohibited by the Puerto Rico Insurance Code.

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