COVID-19: States Attempt to Shift Economic Burden to Insurance Industry with New Legislation on Business Interruption Coverage

An increasing number of state legislatures have proposed bills addressing insurance companies coverage of “business interruption” insurance, which is typically applicable only to losses resulting from physical damage to property such as that caused by a fire or earthquake, and generally inapplicable to losses caused by viral or bacterial pandemics. These bills would force many commercial property insurers to provide retroactive coverage for businesses losses resulting from the COVID-19 pandemic. What are the merits and variations among the legislation proposed to date, and the potential legal challenges?