Texas Bill Would Mandate Business Interruption Cover for Pandemic Losses

February 10, 2021

A bill filed in Texas would require business interruption insurance policies to cover losses from a pandemic.

Under SB 249, filed by Sen. Charles Schwertner, business interruption insurance would be required to “cover loss caused by a pandemic, including loss caused by the order of a civil authority made to prevent the spread of a pandemic, without regard to whether the pandemic caused a direct physical loss to the policyholder’s property.”

It would apply to all insurers providing business interruption insurance in Texas, “including a county mutual insurance company, farm mutual insurance company, Lloyd’s plan, and reciprocal or interinsurance exchange.”

If passed and signed by the governor, the legislation would be effective Sept. 1, 2021, and apply to policies written or renewed with an effective date on or after Jan. 1, 2022.

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