Click here to read full LDI Bulletin
The Louisiana Department of Insurance issued a bulletin on February 11, 2021, addressing authorized (admitted) and approved unauthorized (surplus lines) insurers that provided property coverage to Louisiana citizens who were impacted by the multiple catastrophic events of 2020. As the recovery process continues in southwest Louisiana, our Taylor Porter attorneys share important information with you as you work to rebuild your homes and businesses. Click here to read our previous blog on property damage.
Bulletin 2021-02 provides that the time limit for the submission of proofs of loss may not be less than 180 days. The time limit may not commence as long as a declaration of emergency is in existence and civil authorities are denying the insured access to the property. No claim can be automatically denied because of the inability of the policyholder to provide sufficient proof of loss within the time limits and requirements of the policy.
This guidance applies to policyholders’ losses that arose due to a catastrophic event for which a state of disaster or emergency was declared pursuant to law by civil officials, and for those areas within the declaration.
The Bulletin further provides that any policyholder with replacement cost coverage is entitled to complete repairs to the property within one year from the date of the loss or the issuance of applicable insurance proceeds, whichever is later. Adherence to this provision entitles the policyholder to receive full value of the covered damage that has been repaired, without reduction for depreciation.
Essentially, the Bulletin directs insurers to act in good faith regarding the submissions of the proofs of loss. The Bulletin warns insurers that any attempt to cancel or non-renew a policy under the guise that damage has created a “material change in the risk” is inappropriate and any such action by an insurer will be the subject of a regulatory enforcement action by the Commissioner.
Insurance Tips for Rebuilding Your Home and Business
Reviewing and evaluating all potentially applicable insurance policies for coverage are key steps in recovering from catastrophic events. Business owners need to understand the language within their commercial property insurance policies, particularly concerning Business Interruption Insurance. Business Interruption Insurance coverage can reimburse business owners for lost profits during the time that the business was interrupted because of a catastrophic event, such as a hurricane.
Most commercial property insurance policies include coverage for business income lost as the result of a hurricane, even if the business’ physical location is not damaged. Contingent business interruption provides coverage for business interruption losses due to damage to customers or suppliers.
It is important to review your commercial policy as its provisions will control your rights and obligations. It is also important to value and document the loss, and keep detailed records documenting when and how business was interrupted, before submitting a claim under business interruption insurance coverage.
Here are several steps to help you properly prepare to address your insurance claim as securing insurance proceeds and assistance in a timely manner is critical to the recovery process of your business.
Taylor Porter attorneys are available to help business owners with hurricane claims, should you have legal questions in the recovery process.
About Rick Norman: Taylor Porter Special Counsel Rick Norman leads the Firm’s Lake Charles Taylor Porter Office. He has represented southwest Louisiana business and industry clients for 35 years, practicing in commercial litigation, insurance, labor and employment, construction, health care, and transactions. Rick is the author of two legal treatises on business law used by both practitioners and in law schools: Louisiana Employment and Louisiana Corporations. Rick is the president of the Louisiana State Law Institute, an arm of the Louisiana legislature that studies and drafts legislation. He also serves on Law Institute committees rewriting the Louisiana Wage Payment Act and the Louisiana Limited Liability Companies Law.
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